Are Australians Really Paying More for Electricity Than the Rest of the World?
You’ve probably heard the grumbling: Australians are paying through the nose for electricity these days. It wasn’t always like this—once upon a time, we boasted some of the cheapest energy globally. But now? It’s all gone downhill, and the shift to renewable energy is often blamed. Or so the story goes. But here’s where it gets controversial: What if this widely accepted narrative isn’t entirely accurate? Let’s dive in.
First, let’s tackle the big question: Are Australia’s electricity prices higher than most other countries? The short answer might surprise you: No, they’re not. In fact, we sit squarely in the middle of the pack when compared globally. According to the Australian Energy Council (AEC), between 2023 and 2025, the average electricity price for Australian households was 39 cents per kilowatt-hour (kWh). That’s just a smidge above the OECD average of 38 cents per kWh, placing us as the 15th most expensive out of 38 countries. Not too shabby, right?
But here’s the part most people miss: Comparing prices without considering living standards can be misleading. Carol Tran, an AEC analyst, points out that a household in Australia paying 39 cents per kWh is in a very different financial position than a family in Spain, the Czech Republic, or Colombia paying the same amount. When you adjust for the cost of living, Australia’s ranking drops significantly—from 15th to 24th. Suddenly, our electricity affordability looks pretty competitive on the global stage.
Has our international standing changed over time? There’s a lot of talk about Australia losing its edge in cheap energy, but the data tells a different story. Back in 2016, the AEC conducted a similar analysis using 2014 data, adjusted for purchasing power exchange rates. Guess what? Our ranking then was comparable to today’s. A decade ago, we were the 21st most expensive out of 32 nations—not far off from where we stand now. So, while our electricity prices have risen, so have those in other countries. It’s a global trend, not just an Australian problem.
Now, let’s talk about how much electricity bills have actually increased in recent years. It’s no secret that power prices have been climbing, but the picture is complicated. Regional variations, taxpayer-funded rebates (especially during the fallout from Russia’s invasion of Ukraine), and fluctuating wholesale prices all muddy the waters. For instance, on the east coast, the default market offer (DMO)—a cap on what electricity retailers can charge—has risen by 30%-32% in Queensland and NSW over the past three years, and by 25% in South Australia. Victoria’s increase has been more modest at 19%.
And this is where it gets really interesting: Despite these increases, many Australians are actually paying less for electricity now than they were three years ago. Thanks to generous subsidies, households in NSW, South Australia, and Victoria have seen their bills drop by 5%-17%. Queenslanders in the southeast have it even better—their quarterly bills have gone from $230 to a $100 credit. Without these subsidies, however, bills would have soared by 19%-66% in some regions. So, while the raw numbers show an increase, the reality for many is quite different.
So, why have power prices gone up so much? Johanna Bowyer, a lead analyst at the Institute for Energy Economics and Financial Analysis, points to two main culprits: wholesale electricity prices (driven by the cost of power generation technologies) and network costs (think transmission towers, poles, and wires). Here’s the kicker: Renewable energy isn’t the villain in this story. In fact, climbing coal prices and, more significantly, gas prices have been the real drivers. Research from Griffith University found a near-perfect correlation between gas prices and electricity prices on the east coast over the past decade.
But here’s the controversial bit: While renewables are cheaper to generate, the infrastructure needed to deliver this power—batteries, transmission lines, and more—is proving costlier and slower to build than expected. As Tony Wood of the Grattan Institute puts it, we’ve underestimated the challenges of getting green power to market and ensuring it’s reliable. So, while renewables are offsetting some costs, many Australians are left wondering when, exactly, cheap green energy will translate to cheaper bills. The answer? Not yet.
What can households do? Bowyer suggests that the most effective way to slash energy bills is to embrace rooftop solar and storage, along with energy-efficient appliances. These measures can cut bills by up to 90%. It’s a powerful reminder that while the broader energy landscape is complex, individual actions can make a huge difference.
Now, over to you: Do you think Australia’s electricity prices are fair, or is there more to the story? Are renewables the solution, or are we overlooking other factors? Let’s keep the conversation going in the comments!
