Victoria Urged to Accelerate Energy Transition to Avoid $33 Billion Cost Increase

A new report by Nexa Advisory warns that Victoria must stay the course on its energy transition to ensure power reliability and protect consumers from unnecessary costs. According to the analysis, delays or cancellations of generation and transmission projects could increase total wholesale electricity costs by $33.0 billion between 2027 and 2050. Stephanie Bashir, CEO of Nexa Advisory, emphasized that completing the energy transition is the only path to securing the lowest electricity prices for households and businesses.

Between 2027 and 2031, a disorderly transition could push Victoria's average wholesale price from $62.29/MWh to $85.20/MWh, representing a 37 percent increase. These wholesale impacts would flow through to customer bills over the five-year period, adding up to $472 for a representative household, $4,719 for a small business, and $11,797 for a large business. Meanwhile, Yallourn Power Station, which generates one-fifth of Victoria's electricity, is scheduled to close in mid-2028 but suffers from an annual unplanned outage rate of up to 32 percent.

To manage these risks, Nexa Advisory urges the Victorian Government to confirm Yallourn's 2028 closure and publish a delivery plan for replacement capacity. The firm also recommends accelerating critical transmission works such as WRL and VNI West, alongside unlocking onshore wind, solar, and battery storage projects inside and outside Renewable Energy Zones. Furthermore, the report calls for contracting a diversified firming portfolio where gas generation serves strictly as a targeted back-up.