“A lot of unknowns:” Why states may go their own way in “balkanisation” of Australi... - Renew Economy

States are threatening to pursue separate electricity policies rather than coordinated national grid planning, fragmenting the unified market. The article cites concerns among states about being locked into a national strategy they see as either too slow or misaligned with their own interests, with one expert quoted saying there are "a lot of unknowns" in the transition pathway.

Where this fits

This fragments the one lever Australia has for managing the reliability and cost crisis that a renewables-only grid creates. A national grid coordinates firming, transmission investment, and demand management across state borders. Balkanisation trades away economies of scale and forces each state to solve the firm-power problem alone, raising costs and duplicating infrastructure. It also splinters bargaining power with equipment suppliers and pushes each state toward expensive local solutions: more batteries, more gas, more transmission to import power from neighbours. The sovereign question sharpens: a fragmented grid is weaker to coercion, and each state must now source its own critical minerals and hardware from a China-dependent supply chain, with no negotiating weight.

What it means

Australia is building an electricity system with no single firm backbone. A nationally coordinated renewables grid was hard enough to plan and cost. A balkanised one is harder still, because gas plants and long-duration storage must sit in the right places and be used in concert. If states pursue separate paths, the whole-system cost, transmission overbuild, duplication, stranded assets, higher firming costs, rises sharply. It also means no state has the scale to negotiate on critical materials or batteries, and each is isolated when supply shocks hit. A firm national backbone, whether gas-heavy or nuclear, solves both. Australia has chosen neither.