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

Energy affordability is a key concern for households in the European Union (EU) and Australia, as the transformation of the electricity sector unfolds. A central question is whether a cleaner greener electricity system necessarily means rising costs for consumers, or whether decarbonisation of the sector, under the right regulatory and market settings, could mean improvements in affordability. There is no simple universal answer to this question. The answers lie in understanding what works in specific contexts, and whether this can be applied to other places countries, regions and jurisdictions. In this paper we harness lessons learned on energy affordability from both the EU and Australia with an emphasis on the cost drivers in the electricity system, regulatory frameworks and interventions to mitigate hardship and address energy poverty. We find that there are key similarities that make the EU’s experience useful to compare and contrast with Australia’s. In both regions there are similarities in the spatial expanse of the networks across jurisdictional boundaries, governance arrangements and degrees of market liberalisation and privatisation. On the other hand, the nature of the problem of unaffordability and energy poverty manifest in different ways across the EU and Australia.