Despite a surge in renewable capacity, the share of clean energy in the national electricity grid has remained flat, signalling deeper issues in infrastructure and policy.
Australia is aiming for 82% renewable energy by 2030, but new findings indicate that the proportion of renewables in electricity generation is still just over 40% – the same as last year. Emissions reductions now need to accelerate significantly to keep pace with national targets. This has triggered concerns over the economic impact and energy stability.
Investment in wind and solar has continued to grow, but grid limitations, weather conditions and financial hurdles have held back the impact of these developments. Hydroelectric production has suffered due to low rainfall in regions such as Tasmania. Wind supply has faced setbacks from prolonged calm periods.
Government briefings now show that the Department of Climate Change, Energy, the Environment and Water has informed leaders that slashing emissions by 43% from 2005 levels by 2030 demands faster progress. Temporary emissions drops during COVID have now reversed, and while coal-fired power is being phased out, emissions from transport are increasing. Land-based carbon capture is also becoming less effective.
The key policy driving clean energy investment – the Capacity Investment Scheme – is proving more expensive than planned. A comprehensive review is now in progress and may replace government subsidies with a market-based approach. Officials believe this could attract more private investment and reduce pressure on public funds.
This transition is also affecting households. Rising wholesale electricity prices are pushing up power bills, with some forecasts predicting increases of up to 8.9%. These hikes come as Australians face broader cost-of-living pressures, creating additional challenges to public and political support for green initiatives.
Although 7.5 gigawatts of renewable capacity has been added this year, long delays in project delivery and financing continue to slow progress. The Clean Energy Regulator expects renewable energy to make up between 44% and 46% of the energy mix by 2025. However, this remains below the level needed to stay on track for Australia's 2030 climate goals.
