Will There Be an End to Electricity Price Rises in 2026?

For the better part of a decade, Australian households have become used to electricity bills that creep higher each year. Retailers, regulators, state governments and the Federal Government have each offered explanations—wholesale volatility, ageing coal plants, infrastructure upgrades, extreme weather, the global gas market, and geopolitical shocks.

By late 2025, the question many Australians are asking is simple: will 2026 finally bring an end to electricity price rises?

The answer is complex. While several indicators suggest easing pressure—particularly falling wholesale prices and accelerating renewable investment—there remain major structural and political factors that could keep bills elevated for years.

This long-form analysis breaks down the forces driving prices, what is already locked in for 2026, and whether any meaningful relief is actually on the way.

1. The Price History That Led to 2026: Why Did Electricity Get So Expensive?

The coal cliff

Australia’s ageing coal fleet—some plants over 40 years old—has become increasingly unreliable. Every unplanned outage forces the market operator to fire up gas peaker plants, which are vastly more expensive. Each incident pushes wholesale prices upward, setting the baseline for future retail bills.

Global volatility and the gas link

Australia’s electricity prices remain tied to international gas prices, especially on the east coast. When global shocks—like the Russia–Ukraine conflict—sent LNG prices soaring, the Australian wholesale market followed.

Network upgrades and ‘poles and wires’ costs

Transmission infrastructure is being rebuilt to connect remote solar and wind zones to the grid. These upgrades, essential for the renewable transition, are multibillion-dollar projects that get passed on to consumers through regulated network charges.

Retail market fragility

Several smaller energy retailers collapsed in 2022–2024 because they couldn’t withstand wholesale volatility, reducing competition and driving consolidation. Less competition has also contributed to upward pressure on bills.

2. The 2026 Picture: What We Know Right Now

As 2026 approaches, several major developments shape the outlook:

Wholesale prices are finally falling

The Australian Energy Market Operator (AEMO) has reported a cooling of wholesale prices from their 2022–2023 highs due to:

• Rapid growth in solar and wind generation

• Major battery projects coming online

• Softer global gas prices

• Fewer unplanned coal outages in 2025 than previous years

Historically, falling wholesale costs flow to retail customers—but slowly.

The Default Market Offer (DMO) will still act as an anchor

Regulators set a maximum benchmark price each year. In 2025, most states saw increases between 5% and 10%.
Early modelling for 2026 suggests the DMO may stabilise or fall very slightly, but the drop—if it comes—is unlikely to be dramatic.

Network charges will continue rising

The renewable transition requires billions in new transmission lines. These are long-term investments with fixed timetables. The Australian Energy Regulator (AER) has already approved several multi-year network expenditure programs. This means network fees in 2026 are almost guaranteed to increase, even if wholesale energy becomes cheaper.

Battery storage is expanding but still expensive

Large-scale batteries like Victoria’s Big Battery and Queensland’s SuperGrid investments help smooth volatility, but the system-wide benefits take time to filter through to retail pricing.

State-based rebates may mask real cost movements

NSW, QLD, SA and WA all introduced bill relief programs in 2024–2025. These rebates continue into 2026 but vary by state.
Bills may look lower—but underlying prices might still be rising.

3. The Big Forces That Will Decide Whether Prices Fall or Rise

A. How quickly new renewable projects are completed

AEMO’s Integrated System Plan relies on a huge pipeline of renewable generation—over 10,000 MW—coming online by 2030. The speed of construction is crucial.

• If projects are delayed by planning approvals, grid connection issues, or supply shortages, price relief will stall.

• If they accelerate, wholesale prices could drop further.

Right now, Australia is behind schedule on some transmission projects, which limits the ability to bring new renewable power online.

B. Coal closures and the risk of a reliability gap

Several coal plants have closure dates set for 2025–2030. If multiple facilities retire early or unexpectedly, the system may face short-term reliability gaps.
Any gap pushes wholesale prices up sharply.

C. International gas prices

Despite renewables, Australia still leans heavily on gas-fired generation during peak moments. International gas prices—linked to conflict, supply disruptions, and global demand—remain a wild card.

D. Consumer behaviour and rooftop solar dominance

By 2026, more than 3.7 million Australian homes will have rooftop solar.
This reduces daytime demand, lowers wholesale prices, and stabilises the grid—but it means retailers earn less, pushing some to raise fixed charges to compensate.

E. Government intervention

The federal government has repeatedly intervened with:

• price caps on gas

• consumer rebates

• underwriting renewable projects

• direct investment in transmission

More intervention could suppress price spikes—but carries political risk and cost.

4. Will Electricity Prices Stop Rising in 2026?

Short answer: Probably not entirely—but the worst may be over.

The realistic forecast

Most experts expect 2026 to be a year of stabilisation rather than dramatic increases or decreases.

Here is the likely 2026 trajectory:

✓ Wholesale prices: flat to slightly down

Better renewable penetration and improved coal reliability will keep prices calmer.

✓ Retail bills: small increase or stabilisation

Network costs and retailer margins will soften the benefits of cheaper wholesale prices.
Many households may see a 0–5% increase, which is effectively stability compared to the 15–25% spikes of earlier years.

✓ Outliers: some states may see small declines

States with high renewable penetration and strong competition—like SA and VIC—may experience modest retail price decreases.

✓ Rebates will keep many bills from rising

Government subsidies may be extended, particularly if inflation remains sticky.

5. What Would It Take for Bills to Actually Fall?

A. Faster transmission build-out

The single biggest barrier to lower bills is slow construction of new transmission connecting renewable zones.

B. More competition among retailers

If new challenger retailers emerge—something that slowed after several collapses—retail margins could be forced downward.

C. A stable coal exit schedule

Unplanned or early retirement of coal plants causes sudden price spikes.

D. Big batteries hitting scale

By 2027–2028, large-scale batteries could significantly reduce volatility.
In 2026, the benefits will be partial.

E. Global stability in energy markets

If gas prices remain low and steady, Australia’s wholesale market will follow.

6. What Can Households Do in 2026 To Reduce Bills?

Maximise solar

• Adding panels (if roof space allows)

• Adding a home battery

• Joining a virtual power plant (VPP) program
  These can reduce bills by 50–80%.

Move to time-of-use tariffs

Households that can shift consumption—pool pumps, EV charging, laundry—to off-peak periods can meaningfully reduce costs.

Compare retailers regularly

Switching between plans can save hundreds. Many households remain on legacy plans well above market rates.

Take advantage of rebates

State and federal relief programs will continue across 2026, though eligibility criteria may change.

7. Final Verdict: Is Relief Coming?

2026 will mark a turning point—but not a dramatic downward slide.
Most Australians will see stabilisation, not substantial reduction. The era of relentless double-digit increases appears to be ending, but the structural costs of the renewable transition and network upgrades will keep bills elevated.

Meaningful, across-the-board price reductions are more likely after 2027–2028, once new transmission lines, large batteries, and renewable projects reach maturity.

For now, the best hope for households is that 2026 brings what Australians desperately need: a breather.

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