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.<\/p>\n
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\u2019s energy security. Black coal contributed 37.5 per cent of Australia\u2019s 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<\/a>.<\/p>\n In 2024, the government launched<\/a> 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.<\/p>\n 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. \u201cOur old coal-fired power stations are breaking down; they\u2019re retiring,\u201d Westerman said<\/a>. \u201cThey\u2019re getting replaced by the least-cost energy, which is renewable energy, backed with storage, connected in with transmission. We\u2019ll have a bit of gas there for the winter doldrums. That is just what\u2019s happening,\u201d he added.\u00a0<\/p>\n In 2023, Climate Change Minister Chris Bowen said<\/a> the COP28 climate summit made it clear that \u201cour future is in clean energy, and the age of fossil fuels will end.\u201d This followed the signing of a deal<\/a> 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.<\/p>\n In 2025, 42.7 per cent of Australia\u2019s electricity generation came from renewable sources<\/a>, 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.<\/p>\n 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 270,000<\/p>\n home batteries were purchased in 2025. The creation of favourable national policies on battery storage has driven the increased uptake of recent years.<\/p>\n 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\u2019s 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.<\/p>\n David Dixon, a senior analyst at Rystad, said<\/a>, \u201cAustralia won\u2019t stay at number three, but it has been going gangbusters.\u201d He added, \u201cWe have never seen anything of this magnitude before.\u201d Australia has surpassed 2 GWh of battery storage per million people, after what Dixon called an \u201cunprecedented build-out\u201d.<\/p>\n Rooftop solar power is extremely popular in Australia, and around four million homes produce rooftop solar<\/a>, 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.<\/p>\n