Net Zero Isn’t the Villain Behind Your Power Bill
There’s been a surge of political noise claiming Australia should abandon its Net Zero commitments because “Net Zero made power bills explode.” It’s an appealing line, emotional and easy to weaponise, but it doesn’t match the evidence from Australia’s energy regulators, market operators or Treasury.
A significant portion of the pushback against Net Zero comes from coal and gas interests and political actors aligned with them. These groups argue the transition is the prime cause of high power prices. But when you look at the hard data, the real drivers of electricity prices lie elsewhere: global gas markets, ageing coal plants and regulated network costs.
What Net Zero Actually Is
Net Zero doesn’t mean shutting industries down overnight or paying international bodies. It simply means this:
Reduce Australia’s greenhouse gas emissions as much as practicable, and balance any remaining emissions with removals by 2050.
Australia has formally committed to this through its national climate submission and 2050 target. This commitment was made by the Australian Government and is reported through the United Nations climate system.
Net Zero is just an outcome target. It doesn’t fine or charge any business a “carbon tax,” and nothing is automatically added to your energy bills. Costs come from the specific policies or infrastructure choices used to try and achieve the target.
The point of Net Zero is to join the rest of the world in a commitment to reducing pollution while creating cheaper renewable generation, modernised grids, cleaner industrial processes and a modest use of credible removals. It gives momentum to modernising energy systems, supports new regional industries, guides long-term investment, and positions the country for lower-cost energy and new jobs.
The goals and methods for how Australia meets Net Zero are set by Australia, and so far Net Zero has helped create many new jobs within the renewable sector, measurably reduced the cost of energy production, and begun to have a measurable impact on cutting pollution.
Does Net Zero Cost Australia Money?
Net Zero itself doesn’t cost money. Actions to achieve it — grids, storage, renewables, efficiency — do have costs, but also benefits.
Treasury’s modelling shows:
An orderly, well-planned transition lowers wholesale power prices over time.
A disorderly or delayed transition increases costs, uncertainty and risks.
Much of the required infrastructure investment (like transmission) is needed regardless because the existing network was built for 1970s coal stations and is now ageing out.
The cost question is not “Net Zero vs no Net Zero”.
It’s “planned upgrade vs chaotic collapse of legacy assets”.
The Paris Agreement – what is requires
There is a lot of misinformation here, so let’s be precise.
The Paris Agreement is a legally binding treaty that does not fine countries, enforce penalties, or even impose any costs on Australia.
Instead, it requires countries to:
- Set national emissions targets (NDCs)
- Report progress transparently
- Strengthen targets over time
The compliance mechanism is non-punitive. There are no fees, fines, sanctions or payments to international bodies for missing targets. Accountability is based on transparency and international peer pressure, not enforcement.
This dismantles one of the loudest myths in circulation.
So What Actually Drives Australian Power Prices?
Here’s a clear, regulated-data-backed breakdown of the major influences on electricity bills. These are approximate attributions based on reporting from the Australian Energy Regulator (AER), AEMO and independent modelling of recent market behaviour.
Estimated contribution to recent power price pressures:
- Gas price spikes & gas shortages ~42%
Gas sets the marginal price in many intervals, and international gas volatility hit the NEM directly. - Coal-plant unplanned outages & closures ~26%
Australia’s coal fleet is old. Failures force reliance on more expensive generation. - Network pass-through charges ~15%
Regulated revenue for poles and wires, which is set by the AER. - Retail pricing strategies & margin recovery ~8%
Retailers adjusting margins after years of suppression. - Renewables integration & transition factors ~7%
Integration requires grid upgrades and storage, but these are manageable and declining as technology improves. - International policies, exchange rates & residual factors ~1%
Method: These percentages are best-estimate attributions synthesised from AER market reporting, AEMO analysis of price drivers and independent modelling. They are indicative — to show which drivers dominate — rather than exact accounting line items.
Are Renewables Making Prices Worse?
No. In fact:
Renewables regularly lower wholesale prices during periods of high solar and wind output, which is increasingly common.
Data from AEMO shows that in 2023–24:
- High solar output pushed daytime wholesale prices down significantly.
- Wind and solar displaced expensive gas generation.
- Storage increasingly reduced evening peaks.
The pressure points in the system — gas volatility and coal unreliability — are fossil-fuel system issues, not renewable ones.
Why Are Some Groups Campaigning to Scrap Net Zero?
A large part of the political narrative to “bin Net Zero” is coming from:
- Fossil fuel lobby groups
- Coal & gas aligned political campaigns
- Industry bodies representing coal-heavy sectors
- Commentators with ties to fossil industries
The reason is straightforward:
Net Zero accelerates the decline of coal and, over time, gas.
This is not a moral judgement — it’s an economic one. Renewables with storage are now cheaper to build and operate than new coal and often cheaper than existing coal during peak outages or fuel spikes.
Lobby groups understand that losing Net Zero means they can justify extending fossil assets longer and slowing the transition.
Would Cancelling Net Zero Cut Australian Power Bills?
No.
Every major energy body agrees that the largest price drivers are:
- Global gas prices
- Coal plant failures
- Regulated network charges
None of these go away by cancelling Net Zero.
In fact, cancelling Net Zero would:
- increase uncertainty for investors
- raise the cost of capital for new generation
- delay replacement of unreliable coal stations
- increase exposure to volatile fossil fuel markets
All of these push prices up, not down.
The transition isn’t the cause of expensive electricity — it’s the escape route from it.
Why Net Zero Matters for Australia
Beyond bills, Net Zero is critical for:
- Future competitiveness in global markets
- Clean-energy investment certainty
- Regional economic development
- Avoiding climate damages that cost far more long-term
- Meeting obligations to allies and trading partners
- Protecting Australia’s export position in a decarbonising world
The world is moving. Australia benefits from being an early mover, not a late adopter.
Australia current output of 500 Mt CO₂-e broken down by sector:
- Electricity generation (public electricity supply) ~140 Mt CO₂-e
- Stationary energy (excluding public electricity) ~100 Mt CO₂-e
- Transport (road, aviation, shipping, rail) ~95 Mt CO₂-e
- Agriculture (enteric fermentation, manure, crop soils) ~75 Mt CO₂-e
- Fugitive emissions (oil & gas sector, coal mining leaks) ~50 Mt CO₂-e
- Industrial processes & product use ~30 Mt CO₂-e
- Waste ~14 Mt CO₂-e
Australia can only naturally absorb around ~320 Mt CO₂-e:
- Net LULUCF (land & forestry official inventory sink): ~88 Mt CO₂-e
- Coastal “blue carbon” (mangroves, tidal marshes, seagrasses): ~50 Mt CO₂-e
- Ocean waters around Australia (air→sea uptake): ~183 Mt CO₂-e
The Bottom Line!
Net Zero is not why your electricity bill went up.
Gas shocks, coal breakdowns and network charges are.
Net Zero is simply a destination. The transition lowers long-term prices and improves reliability. Scrapping it would boost fossil-fuel profits and increase economic risk for everyone else.
If the goal is cheaper, cleaner, more reliable energy, the solution isn’t to abandon Net Zero.
The solution is to finish the transition properly: more storage, more transmission, more firmed renewables.
That’s how we bring prices down and protect the planet at the same time.
References:
- Net Zero Economy Authority — “What is ‘net zero’?” page. netzero.gov.au
- Department of Climate Change, Energy, the Environment and Water (DCCEEW) — “Net Zero” overview page. DCCEEW
- The government’s Net Zero Plan — outlines how Australia will achieve net zero emissions. DCCEEW+1
- United Nations — through its Net Zero Coalition, explaining what net zero means globally. un.org
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