High wholesale electricity prices have flowed through into household and business bills. As we approach the 2026 general election, political parties have presented their own diagnoses of the problem and offered different policy solutions.

Understanding the Power Struggle is an accessible introduction to electricity policy and the policies on offer. This research note explains key principles for good energy policy to help voters think more clearly about our electricity system. It then examines each party’s most significant proposals and how they stack up against those principles.

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Principles for good energy policy

The central premise is simple: system costs are what matter. Policies and projects should be judged by their effect on the cost of the electricity system as a whole.

The note explains eight principles:

• Generation cost does not equal price. The cost of generating electricity does not account for all the costs of delivering a dependable supply.
• Capacity is not generation. A power plant’s maximum possible output is different from the amount of electricity it actually produces.
• When and where electricity is available matters. Reliability and the ability to respond to changes in demand affect its value to the system.
• Approval does not mean construction. Consented projects can remain unbuilt for years.
• Large electricity users can benefit the system. They can help spread fixed costs and make fuller use of the system outside peak demand.
• Consider what would happen without a generator. Removing the generator that sets the spot price could mean relying on more expensive generation or reducing demand.
• All forms of generation involve trade-offs. No technology should be accepted or rejected on one measure alone.
• Look beyond the immediate effects. Policy changes can affect investment decisions across the electricity system.

These principles offer tests that voters can apply to competing proposals.

What are the parties proposing?

The research explains how each party understands the problem, what it proposes, and how its policies measure up against the principles.

The proposals range from encouraging competition and private investment to direct government investment, changes to the structure of the electricity market, community ownership, and changes to planning rules.

Each approach involves trade-offs. Government guarantees can shift financial risk from investors to the Crown. Public investment can change the incentives for private investment. Keeping existing arrangements also carries risks if they fail to bring forward sufficient investment.

The question for voters is whether a proposal can help deliver enough dependable electricity, in the right places and at the right times, at an acceptable cost across the whole system. It also needs to maintain the incentives for continued investment.

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