What is the cheapest form of electricity for Australia?

August 26th, 2025

The experts at Australia’s leading energy and science bodies, including the Australian Energy Regulator, Australian Energy Market Operator (AEMO), Australian Energy Market Commission and CSIRO, have crunched the numbers to determine the best, cheapest form of electricity for Australia. Their analysis consistently shows that renewable power, backed by storage like pumped hydro and batteries, is the most cost-effective way to keep reliably powering Australian homes and businesses.

Already, more than 40% of Australia’s electricity comes from solar, wind and hydro power – and this is rapidly increasing. At the same time, the share of fossil fuels in our grid is falling. As Australia’s coal-fired power stations age, they are only operating at around 65% of their full capacity, and are frequently breaking down. Coal outages have been a primary driver of power outage warnings in recent years, as well as contributing to some of the most severe price spikes. Australia’s entire fleet of coal-fired power stations is expected to retire by 2038, and 90% of them will shut down over the next decade.

As coal generators reach their end-of-life, there is no question that we must bring new generation online to power our homes and businesses. But what is the most cost-effective way to reliably power our homes and businesses past the end of coal?