Recently, the South Australian government revealed that in the final quarter of 2025, the wholesale price of electricity dropped to $37 (approximately US$26.22) per megawatt hour (/MWh).
This figure ranks among the lowest wholesale electricity costs in all of Australia. The primary reason for this low pricing is the significant amounts of wind, solar, and battery power available in South Australia, which led to a high energy output towards the end of last year.
This equates to 2.6 cents per kilowatt hour in US currency. In contrast, the average electricity price in the US is around 17 cents per kilowatt hour, largely due to reliance on costly and environmentally damaging fossil fuels.
To put it into perspective, wholesale electricity prices in the third quarter of the prior year stood at A$104/MWh.
Indeed, the price dropped by one-third in just three months.
This decrease did not stem from a reduction in demand. According to the South Australian government, “underlying demand in South Australia increased by 1.2 percent to a record fourth quarter high of 1624 MW.”
The way the reduction in wholesale electricity prices impacts consumers' electricity bills is more about politics than it is about engineering.
Renewables supply approximately 74 percent of South Australia's electricity needs, and the state aims to achieve 100 percent reliance on renewables by 2027, which is just two years away.
In 2024, renewable sources including wind, solar, and batteries provided all of the state’s electricity for 99 days, accounting for 27 percent of the available time, according to the most recent full data.
About half of the homes in the state have solar panels installed. South Australia is also a leader in pairing large battery systems with solar energy production.
Across Australia, there is currently 3 gigawatts of battery storage capacity.
To better integrate the surplus generated during the peak sun hours from rooftop solar, South Australia needs to expand its battery infrastructure. This surplus has led to occasions of negative pricing for electricity, compelling utilities to pay residents to use the power generated.
Although South Australia has a relatively small population of around 2 million, it is perceived as a showcase for what renewable energy advancements can provide for society in developed democracies.
The Labor government in the state has been dedicated to this initiative. Just ten years ago, a significant portion of its electricity was produced through coal.
Regrettably, the Liberal party is promoting further investment in fossil fuels.
Since much of this progress has been driven by grassroots efforts, with individuals installing their own solar panels, the momentum of this transformation seems difficult to slow or reverse.
The state is demonstrating that when combined, wind, solar, and battery technologies can be remarkably cost-effective.
Furthermore, there is significant potential for solar panels to become cheaper, more efficient, and less cumbersome over the next ten years as advancements in scientific research continue.
Renewable energy sources are already significantly cheaper than their fossil fuel counterparts.
It is accurate to say that new energy sources come with construction expenses, unlike older coal and gas facilities that have already incurred those costs in the past.
However, in numerous areas, the affordability of wind and solar energy has reached a point where establishing a new solar farm and maintaining it can be cheaper than continuing to run an outdated coal or gas facility.
South Australia serves as a proof that wind, solar, and battery technologies can significantly reduce wholesale electricity prices, simultaneously unveiling the deceptive tactics of the Trump administration in the United States.
By leveraging federal support to promote coal and gas, President Donald Trump and his associates are able to sustain high-cost and hazardous energy sources, resulting in increased electricity bills for Americans while directing funds to benefit his campaign contributors in the fossil fuel industry.
If fossil fuels were truly viable alternatives, there would be no need for Trump to exert so much effort in delaying the approval process for new wind and solar initiatives.
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