Submission: Select Committee on the Cost of Living

25 October 2024

To: Select Committee on the Cost of Living
Re: Inquiry into cost of living pressures facing Australians

Thank you for the opportunity for the Institute of Energy Economics and Financial Analysis (IEEFA) to provide input to the Select Committee on the Cost of Living. IEEFA is an independent energy finance think tank that examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

IEEFA’s submission draws on our research and analysis to provide insights on solutions to reduce Australian consumers’ energy costs – a significant contributor to the overall cost of living.

The federal government policy response has focused on short-term relief measures such as the Energy Bill Relief Fund. However, IEEFA considers there are material opportunities to reduce long-term energy costs in four main areas:

• Reducing network costs – by curtailing supernormal profits across electricity and gas networks, enabling greater flexible demand opportunities and developing a phase-down plan for gas distribution networks;
• Reducing wholesale electricity costs – by increasing renewable energy investments
  in line with existing targets, limiting gas generation to the minimum required levels to support renewables, supporting a smooth and fast phase-down of coal, and avoiding more costly alternatives such as nuclear power;
• Reducing overall energy consumption – by supporting more households to increase their thermal efficiency, and move towards more efficient appliances;
• Electrifying gas consumption – through a shift to efficient electric appliances that would cut bills and enable households to avoid paying fixed gas connection fees.

We welcome the opportunity to discuss any of these topics further with the committee.

Kind regards,

Jay Gordon – Energy Finance Analyst, Australian Electricity

READ THE SUBMISSION