06.08.2025
Australians will be paying the price of our governments’ great leap forward in transmission line rollouts and renewables for generations to come.
It was Chinese Communist Party leader Mao Zedong who in 1958 ignored basic economic principles to divert vast rural resources into a catastrophic bid to rapidly industrialise the nation.
Today we have Australian politicians ignoring the same economic principles in a bid to avert a “climate crisis”, that will end up costing Victorians alone more than $25 billion in higher transmission charges over the next decade.
We can only guess at what the federal government is spending on climate action, given it refuses to reveal how much it is pouring into its capacity investment scheme that sets a floor price for renewable developers lucky enough to tap into taxpayers’ pockets.
Household and business are already subsidising a third of every solar and wind developer’s revenue, through the hidden large-scale renewable energy scheme charge on electricity bills, which added up to $1.4 billion in 2024.
It means that as the cost of climate action rises, so do our electricity bills.
So what do our state and federal governments do? They subsidise household bills to offset the impact.
The absurdity doesn’t end there.
The Australian Energy Market Operator 2024 Network Investments report estimates “close to 10,000 km of transmission (lines) is forecast to be needed in total by 2050”, to feed dispersed solar and wind developers’ electricity into our cities.
Given AEMO has just revised up the cost of the 475km VNI West transmission line up to $7.6 billion, building 10,000km of new lines is likely to cost $160 billion at $16m/km.
Dig a little deeper and you discover the cost-benefit analysis AEMO used to justify these transmission investments has been manipulated by our political leaders to push projects onto the right side of the ledger.
AEMO’s 2025 report on its cost-benefits model puts a value on greenhouse gas emissions reduction for 2025-26 of $81.93 per tonne of carbon dioxide, rising to $172.30 a tonne in 2035 and $241.56 a tonne by 2040.
Yet the current market value of an Australian Carbon Credit Unit is $35 a tonne.
AEMO’s report goes on to say the value it uses was calculated using “a method agreed to by Australia’s Energy Ministers in July 2024”.
Of course most of us don’t have time to delve into the detail of AEMO’s flawed economic modelling or discover how much we’re paying in renewable charges on our electricity bills.
But it’s not hard to see where we are headed.
Despite being one of the most energy-rich nations we face a future where large commercial and industrial users’ electricity bills will double or triple over the next five to seven years to cover soaring transmission costs.
They face a future of feast-and-famine renewable electricity supply, which battery developments and Snowy Hydro 2 can’t fix, while relying expensive peak-load gas plants to meet shortfalls.
In the end we will have not pumped any more electricity into the grid, just replaced what we already had. Productivity will continue to stagnate and few long-term jobs will be created.
That’s the economic reality, which doesn’t require a great leap of imagination to envision.