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The Future of Renewable Energy in Australia

No other country is as well-placed to benefit from the transition to renewable energy as Australia with its sprawling landmass, abundant sunlight, and a shoreline stretching for thousands of kilometres. What Australia needs are the right policy framework and investments in building a green energy infrastructure to quickly reach the target of producing 50 per cent of its energy needs from renewable sources. The transition to a clean energy future will require massive private investments and there is immense scope for setting up profitable businesses in Australia that deal with the generation of clean energy (solar and wind) or its transmission including setting up a smart grid.

If Australia plays its cards right, by the middle of the century, Australia could be producing 200 per cent clean, renewable energy. A smooth transition to a clean energy future requires that governments have enough political will to push policies that disadvantage fossil-fuels, monitor the energy markets to respond to potential disruptions, and help retrain displaced workers as well as work to limit any damage to businesses and consumers.

25% Renewable Electricity Reached in 2020

Australia’s renewable energy industry is growing robustly with record growth coming from small-scale solar. In 2020, renewable energy contributed 27.7% to Australia’s total electricity generation. Small-scale solar power sector added more than 3,000MWs of new generating capacity in 2020. Large-scale solar and wind projects contributed about 2,000MWs with the completion of 32 projects.

76 more large-scale solar and wind projects are underway as of the end of 2020 which will add 8,000MWs of new generation capacity to the grid. Of these projects, 49 are large-scale solar and 21 are wind.

Clean Energy Report | Clean Energy Council

“Australia’s clean energy transition accelerated again in 2020 as wind and rooftop solar set new records, battery storage came of age, and the hydrogen sector continued its rapid development. This all points to Australia realising its potential as a clean energy superpower,” according to the Clean Energy Council Chief Executive, Kane Thornton.

Tasmania became the first Australian state to generate 100 per cent of its electricity from renewables in 2020. Meanwhile, South Australia too had its ‘day under the Sun’ — so to speak — when, in October 2020, solar delivered 100 per cent of its electricity demand for an hour.

“Much of [Australia’s] progress was driven by state and territory governments, which introduced a number of world-leading renewable energy policies and targets in 2020. However, the states and territories’ progressive energy policies only served to highlight the ongoing failures at the federal level, where arguments about government support for gas and coal overshadowed some genuinely positive developments,” Chief Executive Thornton noted.

Target: 50% Renewable Electricity in 2025

Australia is on track to produce 50% of its electricity from renewable sources based on the rate at which new renewables are being installed.

“Australia is on track to install 17 Gigawatts of wind and solar photovoltaics between 2018 and 2020. That’s 225 watts of renewable power per person per year,” according to the Australian National University’s Energy Change Institute.

Australia’s renewables power past Renewable Energy Target | Energy Change Institute (anu.edu.au)

During 2018 and 2019, Australia was projected to install about 10,400MW of new renewables. Out of this total, 7,200MWs are large-scale renewables (divided roughly equally between large-scale solar photovoltaics and wind farms) and 3,200MWs are rooftop solar power.

At its current rate, Australia is on track for 50% renewable electricity in 2025 | ANU College of Science

(Source At its current rate, Australia is on track for 50% renewable electricity in 2025 | ANU College of Science)

As dependence on renewables increases, there will be a need for greater pumped hydro generation capacity and battery storage capability as well as gas turbines to support the grid during peak demand hours or when wind or solar generation goes through lows.

An aggressive timeline to reach 50% renewable energy target will lead to more jobs being created. There will be a positive benefit across Australia with New South Wales and Queensland benefiting the most. Construction and installation will be the major new jobs. Operation and maintenance of utility-scale renewable energy installations will drive new job creation as well. Most of these jobs will remain in Australia — new jobs in rooftop solar photovoltaics being a case in point.

7b40d7bbefbdd94979ce4de2fad52414.pdf (climatecouncil.org.au)

The share of renewables in the National Electricity Market has occasionally reached as high as 50 per cent as it did in September 2020 when rooftop solar provided nearly 25 per cent supply while utility scale solar added 10 per cent and wind energy added another 13.5 per cent to the grid.

The Technologies Revolutionising Renewable Energy

The renewable energy revolution is taking places thanks to falling prices and increasing demand for clean energy. Here are the key technologies enabling this transformation.

  • With marquee companies such as Apple, Google and Amazon investing in solar power, the march of solar continues as a leading source of renewable energy. Wind and solar will remain the two major new renewable energy sources in Australia.
  • Electrification is spreading into more and more aspects of our lives including transportation and industry. The renewables-based electrification of Australian industry will be a major driver of new investment and job creation in Australia. Some examples of new uses of electricity are the production of hydrogen from water via electrolysis and recycling carbon dioxide captured from the air. Greater use of electricity in industry and transportation will speed up the de-carbonisation of Australia’s economy and improve urban air quality.
  • Power-to-X technologies are a bunch of technologies that turn electricity into heat, hydrogen or renewable synthetic fuels. Investment in these technologies will aid the rapid transformation of Australia into a major exporter of green steel among benefits. Power-to-X technologies also promise a faster shift to renewables by increasing synthetic fuel production. The technologies will help reduce fossil fuel emissions in a range of industries including food production and chemicals and fertilisers. These technologies also touch upon the challenge of long-term energy storage.
  • Distributed generation is becoming more affordable and popular which include rooftop solar to factories using combinations of heat and power systems. Distributed generation of solar has huge potential in Australia and when that happens at scale, it reduces the reliance on centralised power sources. Distributed generation works great when combined with smart grids to keep voltage and frequency stable and handle other ‘under the hood’ tech stuff so that the whole system works smoothly.
  • One last piece of the puzzle that needs to be in place to accelerate the transition to renewables is energy storage. Different energy storage technologies will need to be combined — pumped hydro, battery storage, power-to-X technologies and others.

Hydrogen Dreams

Hydrogen is the true ‘fuel of the future.’ Australia could play a large role in exporting liquid hydrogen once the challenge of manufacturing clean hydrogen is tackled and made economically viable. The cost reductions in wind and solar power generation will soon make zero-emissions green hydrogen cost-effective.


Source: What could Australia’s clean energy future look like? | Pursuit by The University of Melbourne (unimelb.edu.au)

Hydrogen is also a component for producing ‘green steel’ which Australia can export.

Three ways hydrogen is a big component of a clean energy future for Australia:

  • Use solar and wind to create liquid hydrogen for export
  • Use solar and wind to create and export hydrogen-based synthetic fuels (known as ‘bottled sun’)
  • Manufacture and export green steel.

All three are avenues for investments in creating great new Australian businesses and manufacturing facilities that’ll create new jobs. Hydrogen offers a way for Australia to become a major renewable energy exporter which will have several benefits for the Australian economy.

What is needed is an ambitious approach towards the development of these export sectors. Several corollary benefits will include improvements to Australia’s over environmental sustainability as also helping lower the overall cost of electricity which will benefit the broader Australian economy.

But for this to happen, Australia will need to produce 200 per cent of its electricity needs by 2050.

Major Projects That Might Make Australia A Renewable Energy Superpower

Here are a couple of mega projects in the pipeline that will make Australia a renewable energy giant.

  • The Asian Renewable Energy Hub will have 1,600 wind turbines and an array of solar panels spread across 78 sq kms a couple of hundred kilometres east of Port Hedland in the Pilbara. The solar-and-wind hybrid power plant will have a capacity of 26,000MWs. Most of the power will be used to run electrolysers that’ll convert desalinated seawater into green hydrogen. The $53 billion project will produce 1.8 million tonnes of hydrogen every year. It’s about six years away.
  • The Sun Cable project is a 10,000MW solar farm with battery storage at the Newcastle Waters cattle station about 750km south of Darwin. Most of the power generated is planned for transmission via sub-sea cables stretching for 3,800 kms across the Indonesian archipelago to Singapore.

Green giants: the massive projects that could make Australia a clean energy superpower | Energy | The Guardian

Australia aims to become renewable energy export superpower | Financial Times (ft.com)

Financial Incentives Available For Green Energy Storage

All Australian States offer some sort of financial incentive to promote green energy storage.

  • The Australian Capital Territory (ACT) has a A$25 million Next Generation Energy Storage programme to provide 5,000 subsidised solar battery storage systems for ACT homes and businesses.
  • New South Wales (NSW) has an interest-free loan to install solar and home battery storage solutions. It’s available to owner-occupied households earning less than A$180,000 per year. Either up to A$14,000 is offered towards setting up a solar photovoltaic and battery system or A$9,000 is offered to retrofit a battery system to an existing solar photovoltaic system.
  • Northern Territory (NT) homeowners, businesses, and not-for-profit organisations can apply for a A$6,000 grant for battery installations. New installations receive the standard Jacana Energy feed-in-tariff of 8.3 cents per kilowatt hour (kWHr).
  • A programme of loans (A$6,000) and grants (A$3,000) closed in Queensland on 30 June 2019.
  • South Australia offers a maximum subsidy of up to A$4,000 and low-interest loans to all grid-connected homes across the State.
  • If you already have solar photovoltaic panels with a capacity equal to or greater than 5kW in Victoria, you can get point-of-sale discounts on solar batteries. This is available to owner-occupier households in eligible postcodes earning less than A$180,000 per year.

Renewable Energy 2021 | Laws and Regulations | Australia | ICLG