Renewables and energy storage were pitched as a way to drive down power prices. But the hidden costs of the clean energy transition mean lower prices haven’t fully eventuated.

That’s why this week’s news power prices will fall by up to 10 per cent have been gratefully received by the government – and consumers. The falls are real, though they do not apply everywhere.

There are important caveats. The cheaper power will directly apply to customers on the default market offer, the safety net power plan overseen by the Australian Energy Regulator. Fewer than 10 per cent of consumers are on this offer.

Despite this, the decision by the Australian Energy Regulator will be influential. Just as banks tend to follow a Reserve Bank decision on interest rates, energy retailers tend to be guided by the prices set under the default market offer.

Why are prices falling? Solar, wind and batteries can provide power more cheaply than fossil fuels, and renewables have reached as high as 50 per cent in Australia’s main grid. They could have driven retail prices down further if not offset by the rising costs of new transmission lines.

What drives power prices?

The power savings are uneven. In south-east Queensland, retail power prices will fall by 10.7 per cent and in NSW by up to 7.7 per cent. In South Australia, some customers........

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