Power prices skyrocketed 32pc from 2010 to 2021, study blames coal-fired station closures

A new report has found Australia’s electricity prices soared three times faster than the average in OECD ­countries — and it points the finger of blame at one factor.

Australian household’s electricity prices grew faster than France, Germany, Japan, Spain, the UK and the US between 2010 and 2021, a new report has found.

The report also found our electricity prices grew three times faster than the average in the Organisation for Economic Co-operation and Development’s (OECD) member ­countries.

The report, by Dr Geoff Bongers, an adjunct professor at the University of Queensland’s School of Chemical Engineering, was commissioned by the Liberal-linked Menzies Research Centre.

It tracks the growth in electricity prices across a selection of developed countries using the most recent data available.

It found at 32 per cent, Australia had the greatest increase in the cost of residential electricity, against an OECD average growth of 8 per cent.

Australians;' energy bills skyrocketed by almost one third between 2010 and 2021, a new report has found. File picture: iStock

Comparing historical data it found that from 1978 to 2010, household electricity prices in Australia were consistently much lower than the average across the OECD.

This began to change around 2007 as coal-fired power stations began to close.

In the early 2000s, Australian households were paying the equivalent of less than $US100/MWh for electricity, but by 2011/12 they were paying $US300/MWh while the OECD average was around $US150/MWh.

At $US226.61/MWh Australia’s power prices in 2021 were still lower that the OECD average of $US183.67/MWh, and the second lowest of the countries studied aside from the US, but they had risen faster than all of them.

France and the UK were the only other two of the seven countries studied that had price rises greater than 20 per cent.

The report blames the closure of old power stations, which has led to a sharp decline in the country’s reserve generation capacity which has led to price spikes at times of peak demand.

It draws to attention the fact Australia has a less diverse mix of technologies in power generation — most notably no nuclear power.

The Coalition under Peter Dutton is preparing to release a policy ahead of the next election that will include future nuclear power options.

Menzies Research Centre Director David Hughes said the data was a wake-up call to a country facing increased power bills in the years ahead.

“This report shows that in the 30 years to 2010 Australia had some of the cheapest power prices in the world, but around 2007 they began to rise, never to recover,” he said.

“This coincided with a decrease in our reserve generation capacity as Australia’s coal-fired power station began to shut down.”

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