Energy Affordability: Sharing Lessons from the EU and Australia’s Low Carbon Transitions

Sangeetha Chandrashekeran, Johanna Cludius, Dylan McConnell, Viktoria Noka, and David Ritter

Energy affordability is a key concern for households in the European Union (EU) and Australia, as the transformation of the electricity sector unfolds. High prices can lead to energy poverty: when a household cannot afford the essential electricity services needed for a decent standard of living, such as heating. This report compares approaches in the EU and Australia. We analyse the cost drivers, regulatory frameworks and interventions to mitigate hardship and address energy poverty.

We find that that under the right regulatory and market settings, electricity prices can be kept in check as the electricity sector decarbonises. We show  that in both Europe and Australia households in lower income groups spend a much larger fraction of their income on electricity and heat but this dispersion is more pronounced in Australia and has increased over the last decade.   

We argue that Australia can learn a lot from the EU about putting policies in place to tackle energy poverty, however, there are no simple cut-and-paste solutions. The report provides best practice examples for addressing energy hardship from Europe, and  lessons that Europe can learn from Australia’s fast roll out of roof-top solar and smart meters, and the consumer protections that are developing alongside this. 

Read our article in the Conversation

The official launch of this report took place on Wednesday 23 February 2022. View the recording of the launch here 

Web tools and Projects we developed

  • Open-NEM

    The live tracker of the Australian electricity market.

  • Paris Equity Check

    This website is based on a Nature Climate Change study that compares Nationally Determined Contributions with equitable national emissions trajectories in line with the five categories of equity outlined by the IPCC.

  • liveMAGICC Climate Model

    Run one of the most popular reduced-complexity climate carbon cycle models online. Used by IPCC, UNEP GAP reports and numerous scientific publications.

  • NDC & INDC Factsheets

    Check out our analysis of all the post-2020 targets that countries announced under the Paris Agreement.