Opinion: If renewables are so cheap why are prices going up?

How come the more “cheap” renewables we install, the higher our power bills go, asks Matt Canavan.

For the first time I can remember, the federal budget was not about the government’s budget figures, it was about your family’s budget.

The most shocking news from the Labor government’s first budget was that electricity prices are surging by 56 per cent over the next year. And, gas prices are due to rise by 40 per cent.

This means that the energy bill for the average Australian household will go up by more than $1500 a year.

With broader inflation figures hitting multi-decade highs, and interest rates rising, Australian families are facing a cost-of-living crisis.

The cost of living was the biggest political issue at the federal election six months ago. That is why Anthony Albanese promised 97 times to lower your electricity bills by $275 a year.

Labor’s election promise has been broken before its first Christmas.

Now Mr Albanese claims that Vladimir Putin forced him to break his promise. Russia invaded Ukraine three months before the federal election. The price of coal, oil and gas were higher in the weeks after Russia’s invasion than they are today.

If Russia’s invasion was such a big factor, why didn’t Mr Albanese be truthful about this before the election?

In any case, Australia has not, and does not, get its energy needs from Russia. We have abundant sources of our own energy.

Our energy problem is not because of Putin, it is because we are not using our own energy resources.

Electricity prices did not rise after Putin invaded Ukraine, they surged a month later, after the Liddell coal-fired power station shut its first unit.

In March this year – the month after the Ukraine invasion – Queensland’s electricity prices actually fell 10 per cent from the previous month.

The month after the Liddell shutdown prices surged by 50 per cent, and they have stayed high ever since.

Things do not look like getting better next year.

Next April, the other three units at Liddell will shut. If taking out 400 megawatts of coal caused electricity prices to surge by 50 per cent, how much will they increase when we shut off 1200 megawatts of coal-fired power?

Like a dreadlocked guru perched atop Mt Warning, surrounded by crystals, the new PM continues repeating his naive mantra that “Renewables are the cheapest form of power”.

However, in the past few years Australia has been installing wind and solar at a rate four times higher than the rest of the world.

Wind energy turbines at Windy Hill near Ravenshoe on the Atherton Tablelands.

How come the more “cheap” renewables we install, the higher our power bills go?

Australia is not an outlier.

Every country that has installed large amounts of unreliable wind and solar energy has ended up with higher prices.

It is a statistical fact that the more solar and wind a developed country installs, the higher the price their people pay for electricity.

The Treasurer seems to understand the gig is up.

This week he flagged “interventions” to bring down the price of energy.

Unfortunately he seems to be suggesting 1970s style price controls, which always and everywhere just lead to shortages.

Capping prices will not solve our fundamental problem that we do not have enough reliable energy to keep the lights on.

The solution to our cost-of-living crisis is to increase supply not control the price. That means we should once again use Australian resources for Australian families.

We should keep our existing coal-fired power stations running and immediately build new ones as they are doing right now through Asia and Europe.

This week Germany pulled down wind turbines so it could expand a coal mine.

This week’s budget was about family budgets but if we do not get inflation under control a fiscal crisis will soon follow the energy crisis.

That is because eventually people will demand relief, and those demands will soon outweigh the available funds in the Treasury, as happened in the UK dramatically over the past month.

We need to end this net zero emissions madness before it bankrupts us all.

Matt Canavan is an LNP senator for Queensland

Originally published as Opinion: If renewables are so cheap why are prices going up?