Australia’s Clean Energy Boom Is Gathering Speed

Australia has big renewable energy ambitions and is well on its way to shifting dependence away from coal to cleaner alternatives. Having long depended on coal, the government now aims to establish a more diverse energy mix to ensure that Australia can be energy self-sufficient in the years to come, while supporting a green transition. This aim is being reflected by market forces, as energy companies invest heavily in a diverse range of energy sources.Australia is home to an extensive ageing coal fleet, meaning the government must decide whether to double down on coal production or diversify its energy mix to enhance the country’s energy security. Black coal contributed 37.5 per cent of Australia’s electricity production in 2025, while brown coal accounted for 12.1 per cent, a significant reduction from a total contribution of around 80 per cent in 2000.In 2024, the government launched the Renewable Energy Target (RET), a scheme that aims to cut greenhouse gas emissions in the electricity sector and increase renewable electricity generation. The RET sets a target to deliver an extra 33,000 gigawatt-hours (GWh) of electricity from renewable sources every year from 2020 to 2030.The CEO of the Australian Energy Market Operator (AEMO), Daniel Westerman, believes that the time has come for Australia to transition away from coal to renewable alternatives. “Our old coal-fired power stations are breaking down; they’re retiring,” Westerman said. “They’re getting replaced by the least-cost energy, which is renewable energy, backed with storage, connected in with transmission. We’ll have a bit of gas there for the winter doldrums. That is just what’s happening,” he added. In 2023, Climate Change Minister Chris Bowen said the COP28 climate summit made it clear that “our future is in clean energy, and the age of fossil fuels will end.” This followed the signing of a deal by almost 200 states that called on all countries to transition away from fossil fuels. While the government has shown support for the transition, in Australia, the shift has mainly come from market forces rather than strict legislation or regulation.In 2025, 42.7 per cent of Australia’s electricity generation came from renewable sources, up from 38.9 per cent in 2024. Around 15.7 per cent of this generation came from wind power, 13.9 per cent from rooftop solar energy, 7.7 per cent from utility-scale solar, and 5.3 per cent from hydropower. New renewable energy additions totalled 5.9 GW in 2025, marking a 28.3 per cent year-on-year increase.The battery storage industry is also taking off, with a 260 per cent rise in home battery sales and a 233 per cent increase in large-scale battery capacity from 2024 to 2025, making Australia the third-largest utility-scale battery market in the world. Almost 270,000home batteries were purchased in 2025. The creation of favourable national policies on battery storage has driven the increased uptake of recent years.Australia contributed 10 per cent of new global battery capacity in March as the trend continues. It has been benefiting from cheaper batteries from China in recent months, following Beijing’s trade war with the United States. Australia is currently the third-largest importer of Chinese batteries after Germany and the United States, according to data from the consultancy Rystad Energy.David Dixon, a senior analyst at Rystad, said, “Australia won’t stay at number three, but it has been going gangbusters.” He added, “We have never seen anything of this magnitude before.” Australia has surpassed 2 GWh of battery storage per million people, after what Dixon called an “unprecedented build-out”.Rooftop solar power is extremely popular in Australia, and around four million homes produce rooftop solar, giving Australia the highest rooftop PV penetration in the world. In terms of utility solar power, 3.3 GW of new generation capacity was commissioned in 2025, of which 18 projects were utility-scale, totalling 2 GW and representing $2.7 billion in investment. In addition, the government approved seven wind projects, totalling 1.4 GW, far higher than the 775 MW commissioned in 2024.In March, the government endorsed 16 projects with a total value of $22.1 billion in New South Wales (NSW) through its newly established Investment Delivery Authority (IDA). The IDA’s first funding round, which used a streamlined assessment process, included several renewable energy and energy security initiatives. A total of 14 energy projects valued at $24 billion were endorsed, covering pumped hydro storage, battery storage systems, wind farms, solar PV power plants, and gas infrastructure. The government hopes to accelerate future investment activities through the new IDA system.Although Australia is playing catch-up after decades of heavy reliance on coal, the government is working hard to accelerate the deployment of renewable energy. Market forces are also supporting the green transition, as energy companies and various industries look to improve energy security and decarbonise operations, a trend that is expected to continue.By Felicity Bradstock for Oilprice.comMore Top Reads From Oilprice.comU.S. Refinery Utilization Hits 96.2% as Fuel Markets Tighten WorldwideLNG Importers Seek Lower Qatar and UAE Prices as War Upends DealsIndia’s Fuel Exports Set to Soar in July as Refining Margins Jump