New IEEFA Report Finds Clean Energy Solutions Can Lower Household Bills While Supporting Australia’s Net Zero Goals

A new briefing note by the Institute for Energy Economics and Financial Analysis (IEEFA) reveals that improving energy affordability in Australia does not conflict with the nation’s net zero ambitions. Titled Improving Energy Affordability Aligns with Net Zero, the report highlights that measures to reduce electricity and gas costs can simultaneously advance renewable energy deployment, efficiency, and electrification.

Amandine Denis-Ryan, CEO of IEEFA Australia and lead author of the report, said, “The narrative that Australia must choose between lowering bills and cutting emissions is simply false. The cheapest energy future is also a clean one. By focusing on renewables, efficiency, electrification and fairer energy markets, Australia can lower household energy bills while accelerating progress toward net zero.”

Key Drivers of High Energy Costs

The report points to ageing coal plants, high gas prices, and inefficient energy markets—not renewables—as the main drivers of rising electricity costs. With Australia’s coal fleet rapidly approaching retirement and network assets reaching end-of-life, the replacement of these assets is unavoidable. IEEFA’s analysis shows that renewables backed by storage and improved transmission are already the lowest-cost option for new electricity generation and are projected to be materially cheaper than coal by 2030.

High gas prices further strain energy affordability. Historically low-cost gas fields are depleting, and new projects come with high production and transport costs. The report suggests that redirecting small amounts of uncontracted LNG from exports to the domestic market could provide the cheapest supply for Australian consumers.

Market Reforms Essential

IEEFA also emphasised the need for regulatory and market reforms to improve energy affordability. “Fixing regulatory issues, such as systemic supernormal profits by electricity and gas networks, could deliver billions in consumer savings. Market concentration and lack of transparency are key drivers of high prices, and reforms to improve competition are essential,” Denis-Ryan said.

Demand-Side Measures Offer Largest Savings

The report identifies households and businesses as having the greatest potential for cost reductions through demand-side initiatives:

• Replacing inefficient heaters and hot water systems with modern electric alternatives could save $3.4 billion annually.
• Adopting energy-efficient appliances, rooftop solar, and battery systems could reduce household bills by up to 67%, even after upfront costs.
• Industrial energy efficiency and electrification measures offer quick payback periods but remain underutilised.

The IEEFA briefing concludes that Australia can achieve a more affordable, reliable, and clean energy future by combining renewable generation, storage, electrification, efficiency measures, and regulatory reforms, proving that energy affordability and climate goals can progress hand in hand.