It was interesting reading an article from the US news site NPR lamenting the rise in electricity costs, which are growing at twice the rate of inflation.
“Across the country, electricity prices have jumped more than twice as fast as the overall cost of living in the last year”, NPR reported.
“Electricity prices have been rising rapidly across the country—thanks to a combination of factors tied to both demand and supply”.
NPR cites the growth of data centres and natural gas exports as key factors behind the rise in electricity costs.
In states like California, which has ramped up wind and solar generation, electricity costs have risen significantly faster:
Alex Joiner, chief economist at IFM Investors, posted the following chart on Twitter (X) comparing US electricity prices with Australia’s and the UK’s, which are both rapidly deploying wind and solar to replace fossil fuel generation:
As you can see, the rise in electricity costs in Australia and the UK dwarfs the US, even with Australian bill rebates included.
It is extraordinary that Australia—one of the most energy-rich nations on earth—has experienced such rapid energy cost inflation.
Australia is the world’s largest coal exporter, the second largest exporter of natural gas, and has 30% of the world’s uranium deposits. Reliable and affordable energy should be Australia’s number one competitive advantage.
Yet, we have chosen to make energy expensive by failing to reserve gas for domestic use on the East Coast and placed roadblocks on further gas exploration and harvesting.
We have also committed to closing down coal-fired generation, while two of the nations that we export coal to—China and India—continue to expand coal production and consumption.
Finally, we have outlawed the cleanest and most environmentally friendly source of power—nuclear—from being developed despite having the world’s largest uranium deposits.
The end result is that Australia is becoming less competitive as high energy costs add inflation throughout the supply chain, resulting in rapid deindustrialisation and the exportation of jobs and industry to China and elsewhere.
Australia’s self-sacrifice at the altar of net zero surely makes us the dumbest developed nation on Earth.
