13 October 2025, Melbourne – New analysis by Nexa Advisory shows that delays to the build out of renewable energy generation, transmission and storage to back up forecastable energy sources like wind and solar, risks an over reliance on expensive gas generation which could increase wholesale costs to $115.7 billion compared to an orderly transition.
This means that wholesale costs would increase by 15.7 per cent and 21.5 per cent on average until 2050 under the current trajectory.
As the highest cost energy generation source, gas will play a small and declining role as a bridge to the energy transition. Over reliance on it risks driving up electricity costs and failing on emissions targets. Further gas-fired generation will not only be constrained by the highest cost to consumers, but also because global supply chain issues are resulting in lengthy lead times for new gas turbines.
While there is no silver bullet, alternatives are urgently needed to avoid an expensive delayed pathway scenario including:
- Adding between 4.3-8 GW of new renewable generation capacity per year through to 2030 to avoid the need for additional gas-fired generation.
- Fast-tracking intra-regional hosting capacity to avoid the additional 1.8-2.8GW of gas fired capacity if transmission and renewable generation projects continue to be delayed.
- Expanded focus to include private, market-led transmission such as virtual transmission which can reduce costs and deliver projects faster, with a smaller footprint and better supported social licence.
- Certainty of coal closure dates to send the right investment signals to the market.
- Most importantly, support businesses medium and large to access consumer energy such as a business battery scheme.
Nexa Advisory CEO, Stephanie Bashir said:
"Gas has a small back-up role in our energy transition. But it needs to be just that – a back-up role.
"Costs will blow out to over $115 billion during the years up to 2050 if there is a reliance on gas beyond our modelling of an orderly transition and there would be a 22% increase to consumers' bills.
"Simply put, delays mean consumers pay. If you don't build transmission on time the winning fuel is expensive gas.
"While there isn't one silver bullet, Government needs to provide the right market signals: coal closure certainty, market led solutions for virtual transmission and creating accountability to deliver transmission infrastructure on time and on budget.
"Building new gas capacity is simply too slow and expensive, and coal plants are limping to their end of life.
"State and federal governments need to get serious about bringing online the cheapest form of new generation which is renewables, backed by energy storage to avoid high bills."
