Electricity prices are elevated, but anyone who claims renewable energy has driven the rise is either uninformed or is deliberately lying.

A repost from 14 November 2025

One of those things that ’everybody knows’ is that electricity prices have shot up through the roof, particularly since Labor was elected. And many, particularly those with a partisan bias, believe that electricity prices have risen because of Labor’s renewable energy policy.

In fact the story of electricity prices is simpler and it has nothing to do with renewable energy. After staying pretty well unchanged in real (CPI inflation-adjusted terms) over an almost 30-year period from 1980 to 2009, electricity prices almost doubled in a short period, and while they have fluctuated, they have remained around that level since.

The graph below shows that big picture, but if we want to consider what’s been driving that doubling and recent fluctuations, the story becomes a little more complicated.

The big rise that kicked off in 2009 corresponded with privatisation, under the ill-advised National Electricity ‘reforms’, designed by a bunch of economists who wouldn’t have known the difference between a transformer and a capacitor, but who were fully conversant with those abstract Economics 1 supply and demand curves. The extent that price rises were driven by privatisation is disputable, but only a Hayekian zealot would deny that privatisation has led to unnecessary cost and price increases.

Then, in 2012, there was a bump in prices when the Gillard government introduced a carbon price. That bump is evident on the graph, and prices fell in 2014 once the Abbott government, opposed to market approaches to public policy, removed the carbon price. But prices soon rose again, peaking in 2018.

The next bump was in 2023, just after Labor was elected. The Coalition still refers to this as a broken Labor promise, even though journalists can find no record of Labor having promised that Russia would not invade Ukraine. It was rash for Labor to have made a promise that could be blown apart by global events.

As can be seen on the graph household consumers (but not other users) were protected from this rise by a set of Commonwealth and state rebates........

© Pearls and Irritations