There are clear examples of renewable energy success around the world today. In Canada’s province of British Columbia, more than 98% of electricity is generated from clean, renewable sources. Norway produces approximately 98% of its electricity from renewables and also leads globally in fully electric vehicle adoption. Costa Rica operates almost entirely on clean, renewable electricity.
South Australia's Renewable Energy Achievement
South Australia has not yet reached such levels, but it is moving rapidly toward that goal. South Australia generated 84% of its electricity from solar and wind in the last quarter of 2025 — the highest share of any major grid in the world. The state plans to reach 100% renewable electricity by the end of 2026.
Price Impact of Renewables
Despite persistent claims that solar and wind power are more expensive than fossil fuel generation, real-world data shows the opposite. Increased renewable penetration is driving down electricity prices. According to the Australian Energy Market Operator (AEMO), the average wholesale electricity price in South Australia fell by 30% in the last quarter of 2025 compared to the previous year.
As a result, South Australia recorded the lowest wholesale electricity prices in the country, alongside Victoria, which has the second-highest share of wind and solar generation in Australia.
Free Market Contradictions
Some critics argue that the free market should determine energy outcomes, yet advocate maintaining fossil fuel dominance while resisting competition from solar, wind, geothermal, hydropower, and wave energy. They often claim renewables are not competitive because they receive government subsidies, while overlooking the extensive subsidies fossil fuels have historically received — and in many cases continue to receive.
Hidden Costs of Fossil Fuels
A further omission in fossil fuel cost comparisons involves externalized climate impacts. In Australia, climate change-related extreme weather events have imposed significant financial burdens. Insurance claims linked to extreme weather averaged $4.5 billion annually in the 2020s. In 2025 alone, three declared insurance catastrophes generated nearly $2 billion in claims, most of which were related to housing.
Air Pollution Health Costs
Fossil fuel combustion also contributes to harmful air pollution with measurable health impacts. In 2021, outdoor air pollution in Australia was linked to approximately 4,250 premature deaths — more than three times the number of traffic fatalities that year. Air pollution has been associated with 8% of diabetes deaths, 6% of ischemic heart disease deaths, and 4% of lung cancer deaths nationwide.
The economic cost of air pollution in Australia is estimated at $6.2 billion per year, reflecting healthcare expenses, lost productivity, and reduced wellbeing.
True Cost Accounting
When climate damages, health impacts, and other negative externalities are fully accounted for, fossil fuels carry significantly higher total societal costs than clean renewable energy. The retail price consumers pay for electricity does not reflect these broader economic burdens.
Fossil Fuel Price Volatility
Fossil fuel markets are also subject to significant volatility. Gas prices in Australia reportedly rose by 500% following Russia’s invasion of Ukraine, highlighting how geopolitical instability can rapidly increase consumer energy costs. Such volatility exposes households and businesses to financial risk.
Consumer Energy Independence
Traditional centralized energy systems offer limited consumer choice. In contrast, distributed renewable technologies — including rooftop solar, small-scale wind systems, home battery storage, and electric vehicles — enable households to generate, store, and manage their own energy.
Combined with utility-scale renewables and grid-scale storage, these technologies create a pathway toward replacing fossil fuels while enhancing energy resilience and independence.
Key Findings
- South Australia achieved 84% renewable electricity in Q4 2025 — the highest share among major grids globally.
- Wholesale electricity prices fell 30% year-over-year.
- South Australia and Victoria recorded the lowest electricity prices in Australia.
- Extreme weather insurance claims averaged $4.5 billion annually in the 2020s.
- Air pollution contributes to approximately 4,250 premature deaths per year and $6.2 billion in annual economic costs.
- Gas prices surged 500% following geopolitical disruptions.
The Economic Case for Renewables
When direct generation costs, climate damages, health impacts, and price volatility are all considered, renewable energy demonstrates strong economic advantages. Lower wholesale prices, reduced exposure to geopolitical risk, and diminished public health and environmental costs strengthen the case for accelerating renewable deployment.
The Path Forward
South Australia illustrates that high renewable penetration can deliver both environmental and economic benefits. As energy storage costs decline and renewable technologies continue to improve, the economic rationale becomes even more compelling. Utility-scale renewables paired with storage, along with distributed household systems, provide a viable pathway toward a cleaner, more resilient, and economically advantageous energy system.
