Labor vs Coalition Energy Policy Promises vs Reality
In the lead-up to the 2022 election, energy affordability was again a central theme for both major parties. Labor, the eventual winners of that election, promised to reduce household energy bills by $275 by 2025. This commitment widely resonated with Australians who were deep in the post-COVID cost of living crisis at the time.
Treasurer Jim Chalmers recently conceded that Labor’s reduction target is unlikely to be met, though he attributed much of this shortfall to unforeseen global energy market disruptions and the complexities of transitioning to renewable energy sources.
Now, as we head towards the 2025 election, the Liberal party are making some even more exuberant promises, saying that their much maligned nuclear energy plan is going to reduce household energy prices by as much as 44%.
The coalition’s nuclear energy policy
The Coalition's nuclear proposal has faced a mountain of scrutiny regarding its feasibility and timeline. Experts argue that establishing nuclear infrastructure in Australia would be a lengthy and costly process, with significant challenges related to waste management and public acceptance.
Yet, they persist.
The problem isn’t ambition — it’s oversimplification. Both major parties continue to rely on slogans that ignore the technical and economic realities underpinning the energy system.
Energy pricing in Australia is influenced by a wide range of complex factors: international fuel markets, domestic supply constraints, ageing infrastructure, and the costs associated with modernising the grid. None of these are quick, cheap, or politically convenient to explain.
At the same time, wholesale electricity prices have surged in recent years, driven by volatility in global gas markets, coal plant closures, and the investment lag in renewable generation and storage. While parties point fingers across the aisle, the reality is that no single government — or policy — can reverse these trends overnight.
This lack of honesty around energy messaging is eroding public trust, causing derision and a sense that no one is really trying to bring these prices down.
Until that changes, Australians will continue to face high energy bills while promises pile up around them.
The Real Cost of Australia’s Energy Policy
There’s a common narrative that renewable energy adoption will naturally bring down electricity prices — and while that’s true in the long term, the short-term reality is far more complicated. Yes, solar and wind energy are cheap to generate. But the cost of making renewables reliable — through storage, transmission, and backup capacity — is where the price tag begins to climb.
Australia’s energy system was built around large, centralised coal and gas power stations. Replacing that with a decentralised, renewable-powered grid requires a massive rethink of infrastructure.
We're talking about tens of thousands of kilometres of new transmission lines, large-scale battery storage, and a stable supply chain to deliver it all. Recent estimates put this transformation in the tens of billions — a cost that ultimately flows through to consumers and organisations alike.
Compounding the issue is the speed of the transition. As ageing coal plants shut down faster than new capacity can come online, reliability gaps are emerging, adding more pressure to both prices and policy. These are system-wide costs, not always visible in a campaign promise but unavoidable on an energy bill.
It’s not that the energy transition isn’t necessary. It is. But the myth that it comes cheap — or quickly — is doing more harm than good.
What’s Really Driving Rising Energy Prices
While political messaging tends to focus on what the other side is doing wrong, the real drivers behind rising energy prices are far more structural — and far less partisan.
One major pressure point is the state of Australia’s ageing energy infrastructure. As coal-fired power stations exit the grid, they’re not always replaced with equivalent capacity fast enough, creating volatility and reliability concerns. This forces greater reliance on short-term solutions like gas peaking plants and imports, both of which are costly.
Meanwhile, the rollout of renewables has been slowed by planning delays, investor uncertainty, and lengthy approval processes for new transmission projects. Without a coordinated national approach, efforts are being duplicated or stalled across jurisdictions — adding inefficiencies and, ultimately, higher costs.
Federal policy inconsistency has only made matters worse. With successive governments' shifting priorities, long-term certainty for investors has been hard to come by. This stop-start approach means higher risk premiums, slower project delivery, and a more expensive path forward.
Add to that external pressures like global electricity demand increases, global gas prices, climate-related disruptions, and supply chain bottlenecks, and you’ve got a pricing environment that no political talking point can magically fix.
Until energy planning is driven by engineering logic, not election cycles, price relief will remain out of reach.
What Does This Mean For Businesses?
The rising price of electricity isn’t only an issue for the everyday consumer. More and more, we’re seeing businesses struggle with these price increases too. As power prices cause margins to tighten, the flow on effect is that everyday consumers pay more for goods.
Since the last federal election in May 2022, the price of electricity rose nearly 40% before government rebates kicked in to stem the flow—making the overall rise about 20% in total.
This isn’t a margin squeezer; it forces otherwise stable businesses to have to make tough choices about whether they cut staff hours, delay planned upgrades, or ultimately pass these price pressures onto consumers.
But what this really means for businesses is that now is the time to act. We've seen that businesses who actively assess their energy usage and explore their options are the ones in the best position to weather this market volatility.
We Keep Our Promises
Remember, the numbers don’t lie; only the politicians do. And despite what old men standing on podiums in Canberra might say, the truth is that there is no short-term fix coming.
But that doesn’t mean organisations are powerless. With expert support, commercial solar, and long-term energy planning, it is possible to take back control and make smarter decisions in a volatile market.
Get a free energy assessment with Choice Energy today.
