Australia’s coal exit faces supply concerns as wholesale power prices rise

Australia’s climate change minister, Chris Bowen, praised the country’s shift away from coal-fired power stations at the COP31 summit in Turkey, while a report warned that electricity supply constraints could push wholesale prices sharply higher. The timing has drawn attention to the challenge of phasing out coal while ensuring enough replacement power is available.

Consultancy Rystad Energy forecast wholesale electricity prices could rise from about A$60 to A$110 per megawatt hour by 2029 as coal support is withdrawn faster than replacement renewable projects are funded. It said household bills would not necessarily double, since wholesale power is only one part of the final cost. Bowen reiterated Labor’s goal of generating 82 per cent of Australia’s electricity from renewables by 2030, up from 33 per cent in 2022; Australia also remains a major coal exporter.