When it comes to energy, Australia is lucky. It has enough coal and gas to meet its energy needs for most of this millennium. Australia also has renewable energy sources: plentiful sunshine, wind and waves that can be converted into electricity. Yet the price of electricity has nearly doubled since 2007 (Figure 1). This has increased the cost of living and harmed the competitiveness and productivity of the Australian economy. It has even pushed some families into poverty.
With so much raw energy available, why is electricity so expensive? The answer lies in the poles and wires that transmit electricity from power stations to consumers: it has become a lot more expensive to use them.
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