Back to the Caves: Australia’s Renewable Energy Transition (Or, Crash), By James Reed

Australia's renewable energy transition is being hailed as a revolution. In political speeches, media coverage, and government planning documents, we are told this is an inevitable march toward a cleaner, greener, and cheaper energy future. But peel back the slogans, the solar-powered optimism, and the abstract charts, and a very different story emerges, one of spiralling costs, technical impracticalities, and economic self-harm dressed up as virtue. If we continue down this path uncritically, the phrase "back to the caves" might prove less of an exaggeration than it seems.

Wind and solar are not magic. They are intermittent technologies that depend on the weather. That means they can't supply consistent, baseload power without enormous support systems, batteries, pumped hydro, transmission networks, and backup fossil fuel generation kept idling for emergencies. These aren't bolt-on extras. They are core to the functionality of a renewables-heavy grid, and they cost a fortune. Pumped hydro, touted as the great solution to renewable intermittency, is a case in point. It doesn't generate electricity. It merely stores excess energy for later use. The infrastructure required to pump water uphill and release it on demand is staggeringly complex and expensive. Snowy Hydro 2.0, once pitched at $2 billion, is now expected to cost over $12 billion and is still nowhere near completion. Construction setbacks, union strikes, and engineering problems continue to plague the project.

This isn't a one-off. The Borumba Pumped Hydro project in Queensland has seen its cost jump to $18.4 billion, and it's not expected to be ready until 2033, if everything goes right. These are not teething problems. These are symptoms of a deeply flawed strategy, built on a fantasy that renewables are inherently cheap. In practice, each new wind farm or solar array adds to the regulated asset base of the network, assets that must earn a return, which means energy prices rise. And rise they will. The more dispersed and weather-dependent our energy grid becomes, the more complicated and expensive it gets to maintain it. And someone has to pay. That someone is the Australian consumer, twice over. First through their electricity bills, and again through taxes used to subsidise the very projects that make those bills higher.

Compounding the problem is the industrial and labour complexity of building these massive projects. Snowy Hydro 2.0 recently halted underground works after a fan exploded, and now faces strikes from fly-in-fly-out workers demanding a 30% pay increase. These workers already earn upwards of $200,000 per year, yet unions are pushing for pay parity with Melbourne's tunnelling rates, where entry-level workers command $230,000 and experienced ones push $300,000. When infrastructure wages soar like this, it's not just a cost to the project, it's a cost to every Australian who will ultimately fund the outcome.

Meanwhile, Australia continues exporting coal and gas at five and four times our domestic consumption, respectively. Our top customers? China and India, nations that are increasing, not decreasing, their use of coal. So even as we bleed our economy dry to decarbonise, the fossil fuels we refuse to use at home are burned overseas with gusto. The net global emissions impact of Australia committing energy suicide is statistically negligible. We aren't saving the world, we're just outsourcing our emissions and importing inflation, unemployment, and dependency.

The result is that our manufacturing sector becomes unviable. Our heavy industries flee to cheaper energy markets. Our cost of living rises, and our energy security collapses. When the wind doesn't blow and the sun doesn't shine, we pray to the gods of grid storage and ration our usage like it's wartime. This isn't a vision of progress, it's regression disguised as responsibility.

Some will scoff at the idea that this will send us "back to the caves." But what is meant by that phrase is not a literal return to Stone Age living, it's a warning about deindustrialisation, about rolling blackouts, about energy poverty becoming normalised in a first-world nation. It's a warning about abandoning reliable, cheap energy under the illusion that we can make a significant dent in global emissions alone, when the numbers show our sacrifice is symbolic at best.

A rational energy policy would acknowledge the limitations of renewables, the staggering costs of overhauling the entire grid, and the global context in which our decisions play out. It would balance environmental goals with economic resilience. It would not drive heavy industry offshore to countries burning our exported coal while patting ourselves on the back for "doing our bit." And it certainly wouldn't pretend that pumped hydro megaprojects and billion-dollar transmission lines are a shortcut to affordability.

Australia doesn't need to become a net zero martyr. It needs to remain a sovereign, productive nation with affordable energy and industrial capability. That doesn't mean doing nothing, it means doing less of what doesn't work, and more of what does. If we want to protect our economy, our standard of living, and our future, we need to start with realism. Otherwise, the caves are metaphorically waiting.

https://www.macrobusiness.com.au/2025/05/australias-renewable-revolution-will-be-costly/

"Australia's renewable 'revolution' will be costly

I explained last week why Australia's energy costs will inevitably soar as the nation replaces traditional baseload generation with renewables in pursuit of Labor's 82% renewable energy target.

The reasons for the high cost of renewable energy are straightforward. They depend on the weather; therefore, they are intermittent and have low load factors. Renewables need backup generation and loads of storage. They also need a lot more network infrastructure to connect the web of generation sources.

The Snowy Hydro 2.0 pumped hydro project serves as an excellent case study.

Snowy Hydro 2.0 will use extra renewable power created during the day (mostly from solar) to pump water up to a raised reservoir, which will subsequently be released at night to generate hydroelectricity when there is no solar generation.

The cost of the Snowy Hydro 2.0 has risen dramatically. The former Coalition government under Malcolm Turnbull announced that the project would cost $2 billion and be finished by 2021. The government raised the cost to $6 billion, then to $12 billion.

Snowy Hydro 2.0 will also be connected via the 365-kilometer HumeLink in south-west New South Wales. This 'green' project is likewise falling behind schedule, and its cost estimate has risen to about $5 billion.

Problems continue to plague the Snowy Hydro 2.0 project, which remains under construction and a long way from completion.

Underground work was halted in February 2025 after an industrial-sized ventilation fan malfunctioned, sending shrapnel flying through the air.

This week, unions called a strike as they push for pay rises. 'Fly-in, fly out' workers have rejected a revised pay offer and will take industrial action on Wednesday.

The Australian Workers Union's NSW secretary, Tony Callinan, says more than 1,000 workers will initially go on strike for 24 hours, and further industrial action is planned for early next week.

The workers and the unions that represent them are seeking a pay raise of more than 30% over four years, plus a superannuation contribution of 15% and a range of other benefits.

The fly-in fly out employees already earn more than $200,000 annually, but unions want an upfront payment to bring workers into line with tunnel wage rates in Melbourne where an entry-level tunneller can be paid $230,000 annually and more experienced tunnellers earn more than $300,000 a year, followed by 6% annual pay rises.

The upshot is that the final cost of Snowy Hydro 2.0 will escalate. The sky is the limit.

The estimated cost of the 2,000-megawatt QLD Borumba Pumped Hydro project has also soared by $4.2 billion to $18.4 billion, and it will not be completed until 2033 at the earliest. The costs will undoubtedly increase further.

Snowy Hydro 2.0 and Borumba are microcosms of the enormous costs of the renewable 'revolution', which have largely been overlooked in the CSIRO GenCost research and AEMO's Integrated System Plan.

These pumped hydro projects do not generate any net electricity. They simply serve as storage for excess renewable production (mainly solar) during the middle of the day. Battery storage and the dispersed web of solar and wind generators scattered across the countryside are equally expensive.

The cost of constructing each renewable project raises the regulatory asset base and, ultimately, retail electricity costs.

Consumers will pay higher energy costs directly through their bills, as well as through their taxes to support renewable energy subsidies.

Energy costs will increase even further as traditional hydrocarbon generators are kept on standby as backup for when weather conditions are unfavourable and renewable generation and storage fails.\

The ultimate costs of meeting Labor's 82% renewable energy target are ginormous. They will kneecap the economy, increase inflation, and send manufacturing offshore to China, which will forever increase its coal consumption and carbon emissions.

Australia exports roughly five times more coal and four times more gas than it uses. Much of these coal and gas exports go to China and India, which are driving the growth in the world's carbon emissions.

Instead of trying to be a 'net zero' hero, Australia should consume a bit more coal and gas at home and export a bit less, giving itself cheap and reliable energy.

Global carbon emissions would hardly change, Australia's manufacturing sector would thrive, and living standards would be safeguarded.