Myth:

South Australia has the second highest energy prices in Australia because 75 percent of its electricity is produced by renewables.

Fact:

South Australia does have the second highest electricity prices in Australia, but that is not because of its dependence on renewables. It is because it still gets a quarter of its electricity from gas, which is 4.5 times more expensive than solar and five times more so than wind. Once gas is eliminated from the grid as a source of baseload power, electricity prices should fall.  

Another reason for the high price of electricity in South Australia is the state’s relatively small population and wide geographic spread. This means that the per person cost of managing the transmission network is high compared with the eastern states.

A third reason is that South Australia’s grid is still largely isolated from its eastern counterparts, so power cannot be imported when needed. This will change, once Project EnergyConnect is completed in 2027. This will link the grids of NSW, Victoria, Queensland and Tasmania, allowing power to be bought and sold across the four states. (The grids of Western Australia and the Northern Territory will remain completely isolated, given the vast distances separating them from the other states. This helps explain why their power prices are the highest in the country.)

A final factor is related to the renewable energy rollout. Given the large number of homes and businesses that have solar panels and batteries in South Australia, the power network has to be maintained by an ever-shrinking customer base. This has meant higher energy prices for those who remain dependent on the grid.

Solar panels on a church in Adelaide, South Australia. [Source: Ken Enderby]

Sources:

“Why electricity is so expensive in South Australia,” EnergyAction. https://energyaction.com.au/why-electricity-expensive-south-australia/

“Wholesale Electricity Price in Australia: How the Market Works and What Drives Costs,” EcoFlow, 20/3/26. https://energy.ecoflow.com/au/blog/wholesale-electricity-price

“Why South Australians Pay Some of the Highest Power Bills in the Country,” HiE, 27/7/26. https://hirwinelectrical.com.au/blog/why-south-australia-power-bills-high/