ABS data shows higher energy costs lift manufacturing prices - australianmanufacturing.com.au

Australian Bureau of Statistics data confirms that rising energy costs are pushing up manufacturing input prices. Electricity and gas remain significant cost drivers for producers across the sector, with energy inflation feeding directly into the cost of goods.

Where this fits

This is a cost story dressed as a manufacturing story. Higher electricity prices are a direct consequence of the renewables transition: the overbuild of generation capacity (to manage weather variability), the forced retirement of dispatchable coal plant before firm replacements are ready, and the transmission infrastructure needed to move variable power from remote renewable sites to load centres all add to the bill. Manufacturing bears the cost. Australia is also locked into a solar and battery supply chain dominated by China, meaning input costs for the transition itself are set in Beijing and priced in yuan. The one firm, low-material alternative, nuclear, remains banned by law.

What it means

Higher energy costs erode manufacturing competitiveness at a moment when supply chains are fragmenting and countries are reshoring production. Australia cannot cut energy costs by going faster on renewables if the transition itself is incomplete: solar and wind need gas peaking plants and massive transmission buildout, both expensive, both still running. The honest position is that a renewable-only grid, built at today's whole-system cost and China-dependent material price, will not deliver cheap electricity for decades. A firm alternative exists. It is forbidden.