Guest essay By Vijay Jayaraj
Australia’s “green energy” experiment has turned one of the most energy-rich countries into a high‑cost outlier that guts businesses that once anchored its prosperity. The claim that “renewables are cheaper” is a slogan for the propaganda of politicians and the marketing of green grifters who betray families and employers burdened by the bills.
Fall from Economic Stardom
Australia once held a competitive advantage that was the envy of the world, with power prices consistently below the average of OECD countries, which comprise 38 mostly successful economies. That advantage fueled its mines, factories and the standard of living. But is now gone.
But since the mid-2000s, while other nations managed their grids with varying degrees of competence, Australia’s electricity prices rose to being around 30% above the OECD average. This is a massive swing in competitiveness that no government spin can hide.
Driving Australia’s current trajectory is the mythical claim that so-called renewables – mainly wind and solar energy – are inherently cheap and that any short‑term pain will give way to lasting price declines.
However, long‑term data, both domestic and international, contradict that fable. The direct cost of wind and solar hardware has fallen, but the full system cost – including backup power, transmission and financial guarantees – has increased as their share in the mix grows. Politicians rarely highlight this distinction when they promise that “the sun and wind are free.” Although photons and breezes may cost nothing, converting them to electricity is difficult, land-intensive and expensive.
By 2020, Australia had recorded the largest residential price increase among the countries studied: 32% between 2010 and 2020 versus an 8% rise for the OECD. Over the same period, the generation mix shifted away from coal and towards weather‑dependent wind and solar.
Devastating Effect of High Power Prices
The effect on the economy has been a gradual die-off of Australian manufacturing. Energy inputs – both electricity and natural gas – are often the largest variable costs for heavy industry. Australia’s manufacturing share of the economy plunged to a record low of 5% of gross domestic product in 2025.
Smelters have announced closures as rising electricity costs render heavy industry unviable. BlueScope Steel warns that energy costs in Australia are now three to four times higher than in the U.S., undermining the country’s vision of a “Future Made in Australia.”
Large industrial players are weighing exit strategies. Orica, the world’s biggest manufacturer of mining explosives and agricultural fertilizers, and BlueScope Steel have both signaled that the current environment is untenable. They have threatened to relocate Australian facilities to the United States.
Local cafes, metal fabricators and family-owned grocers are besieged by unmanageable costs. In the Northern Territory, 43% of surveyed businesses listed energy prices as a major challenge. The pain spans the nation, with energy being listed as a critical hurdle by a third of businesses in New South Wales, Australian Capital Territory and Victoria and by more than a quarter in Queensland.
This pattern of destruction is not unique to Australia. In Germany – poster child for the “green” transition – 55% of electricity is generated from wind and solar, producing the highest power prices in the world and, according to some, “the worst industrial crisis since World War II.”
Denmark, with around 70% wind and solar in the power mix, made it to the top five on 2023 price charts. Defenders of the green agenda point to countries like Norway or Paraguay as proof that 100% renewables is possible. However, these claims rely heavily on generous hydro endowments that few locales enjoy.
The fact is no modern economy has achieved wind and solar shares of more than 40% without substantial price hikes. Yet the Australian government has a target of 82% by 2030. This is economically suicidal, a guarantee for blackouts and a death blow to what remains of manufacturing.
Australia has lost its way, captured by a false narrative that treats carbon dioxide as planetary threat and dismisses affordability as an afterthought. Without a change, the country will continue to pay unnecessarily high electricity prices, as economic wreckage accumulates – one factory, one small business and one household at a time.
Vijay Jayaraj is a Science and Research Associate at the CO2 Coalition, Fairfax, Virginia. He holds an M.S. in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the U.K., and a bachelor’s in engineering from Anna University, India. He served as a research associate with the Changing Oceans Research Unit at University of British Columbia, Canada.
