Chris Bowen says renewables the right path despite energy price spikes

Chris Bowen says the Coalition’s plan to keep coal in the system for longer will lead to even higher costs, backing Labor’s massive expansion of renewables despite business calls to slow it down.

Climate Change and Energy Minister Chris Bowen on Thursday. Picture: Sky News

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Chris Bowen has fired the starting gun on an election fight over ­electricity prices, despite households facing a 9 per cent bill ­increase, declaring that the Coalition’s plan to keep coal in the system for longer would lead to even higher costs for Australians.

The Climate Change and ­Energy Minister said Labor’s plan to massively expand generation from renewables was the key to bringing energy prices down, ­rebuffing calls from business to slow down the solar and wind rollout in favour of a short-term focus on coal and gas.

This is despite the Australian Energy Regulator saying its ­decision to approve electricity price rises was not only due to coal generator outages but also because of “low solar and wind output that drove high price events”.

The announcement of price increases on the eve of an election will raise the stakes on the Coalition backing an expected extension of electricity rebates in the March 25 budget, with Peter Dutton leaving the door open to rejecting such a proposal on the grounds of fiscal prudence.

Mr Bowen urged Australians to shop around if they were not happy with their electricity bill and refused to concede Labor would fail to meet its pre-election commitment to lower electricity prices by $275. Anthony Albanese also refused to admit the $275 commitment would not be met, arguing Australia was “not separate from world movements”.

“What we have seen is substantial world movements in energy prices as a direct result of the long tail of Covid and supply-chain ­issues, but also of the Russian ­invasion of Ukraine,” the Prime Minister said on Thursday.

With the Opposition Leader calling on Mr Albanese to sack his Energy Minister over the latest price increases, Mr Bowen said there was a “real choice” at the election between “cheaper” renewable energy and unreliable coal. “Not a day in the last two years have we had a coal-fired power station not break down somewhere in Australia,” Mr Bowen said. “I’m not talking about plant maintenance; I’m talking about unexpected breakdowns which then see energy prices spike.

“We want to replace that power with more reliable, cleaner, cheaper renewable energy. Mr Dutton wants to … sweat (on) those coal-fired power stations for longer.”

Mr Dutton declared electricity bills had increased by up to “$1300 a year in your household” under the Albanese government and vowed to restore “balance” to the electricity sector by dumping Labor’s 82 per cent renewables target. “We have to have a balanced and sensible energy system and if we do that we can bring downward pressure on energy prices,” he said.

“It’s time for Chris Bowen to be sacked and I think the Prime ­Minister should accept that Chris Bowen has been a total ­failure as the Energy Minister in this country. Chris Bowen and ­Anthony ­Albanese have presided over a broken promise of a $275 electricity cut which was made on 97 occasions before the election and now power bills have gone up by $1300.”

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the Albanese government’s energy policy “failure” would lead to more business insolvencies.

“The big issue here is supply,” Mr McKellar told Sky News.

“We’ve got ­network-reliability issues, we’re seeing coal-fired generation ­becoming more ­unreliable and we haven’t made up the space yet with renewable capacity. We have to plug up that gap with more gas-generated ­capacity.”

Opposition Leader Peter Dutton on Thursday. Picture: NewsWire / Glenn Campbell

The AER on Thursday released its draft determination for default market offers – the highest rate charged by retailers – with increases across the National Electricity Market of between 2.5 per cent and 8.9 per cent.

Households in NSW will face the highest increases, of nearly 9 per cent, while prices will rise by nearly 6 per cent in southeast Queensland and more than 5 per cent in South Australia. Prices in Victoria are governed by a separate regulator, which earlier ruled prices would largely remain unchanged. Western Australia is not part of the national market.

Small business customers face price increases of between 4.2 per cent and 8.2 per cent. Only a minority of households pay the default market offer, but it acts as a benchmark on which bills are set.

The energy regulator said the increases were driven by higher costs incurred by retailers in procuring electricity and running their businesses and network costs, which it said had jumped by between 2 and 12 per cent.

“Average wholesale market spot prices increased across 2024, impacted by factors such as high demand, coal generator and network outages, and low solar and wind output that drove high price events across DMO regions. These high price events have also affected the price of wholesale electricity contracts for 2025–26,” the AER said.

AER chair Clare Savage said the regulator weighed the need for energy companies to recoup costs against the need to ensure affordability for households. She said that while the cost of producing electricity and distribution costs had risen, retailer costs were the biggest driver. “When you look at the increases from the last DMO, retail costs have been between 40-80 per cent the share of that increase,” she said. “Those are their billing systems, their marketing activities, acquiring and maintaining customers, managing debts and the rolling out of smart meters. Those retail costs are the majority of the increases we are seeing today.”

The announcement of future price increases comes a day ahead of a meeting between Mr Bowen and his state counterparts where a Victorian proposal for the commonwealth to partially underwrite an LNG import terminal is expected to take centre stage.

Under the proposal, the Australian Energy Market Operator would be the anchor buyer of LNG from two facilities, a proposal that if adopted would likely accelerate the developments. The proposal is controversial as there are concerns it could add to domestic prices.