Green energy is shielding Australia from a global power price shock

Renewable energy and batteries are decoupling Australia’s power prices from volatile global markets, helping shield consumers from severe electricity bill shocks emerging in other countries due to the ongoing war in Iran.

While Britain and parts of Europe and Asia are facing double-digit power and gas price hikes this year, households across much of eastern Australia will receive power bill cuts starting next month, driven by steep falls in the wholesale cost of electricity.

Energy executives and regulators credit the divergence to the rapid growth of renewable energy and battery systems, which have better-enabled the grid to capture cheap, abundant solar power during midday peaks and dispatch it after sunset when demand – and prices – typically spike.

Schneider Electric senior director Lisa Zembrodt, an advisor to some of Australia’s largest corporate energy consumers, said the decoupling of domestic power prices from globally exposed fossil fuel markets was a “turning point”.

“The benefits of the energy transition are starting to move through to consumers,” she said.

“It’s not just market analysts and industry experts saying this is what is coming. Now it is in the data. Now we can see it. Now there is no question on where we need to go next.”

The capacity of grid-scale batteries across Australia has doubled in 12 months — giving the technology a bigger role in shaping the electricity market — while renewables make up about half of the grid’s overall mix. Crucially, these shifts have lessened the need to call on expensive gas-fired generation to plug critical supply gaps.

Data from the Australian Energy Market Operator reveals that the volume of energy that batteries were successfully shifting from daytime to evening peaks had more than tripled in the March quarter compared with the same period in 2025.

This had led to an “immediate impact on prices”, said Rick Wilkinson, chief executive of Australian energy consultancy EnergyQuest.

For more than a decade, clean energy advocates had struggled to convince the public that renewables would lower power bills, largely because electricity prices had continued to climb and doubts had persisted over the reliability of a grid dominated by weather-dependent solar and wind, Wilkinson added.

But with the doubling of installed grid-scale battery storage over the past year, the national electricity market may have now “crossed a threshold”, he said.

Despite the Iran war driving up coal and gas prices worldwide, Australian wholesale electricity costs – what retailers pay generators for power – have stayed