Australia has long been known for its dependency on fossil fuel-produced energy, as well as its role as one of the world’s largest fossil fuel exporters, despite skyrocketing energy prices for domestic customers. Although the left-leaning Labor Federal Government has committed to accelerating the energy transition and has legislated a net zero emissions target, it continues to approve new fossil fuel projects. As a result, the country lags behind most other OECD nations in the percentage of domestic energy consumption provided by renewables.
While figures differ, renewable energy accounts for around 10-15% of the country’s energy consumption. According to the Australian Government Department of Climate Change, Energy, the Environment and Water (DCCEEW), renewable energy accounted for around 9% of Australia’s domestic energy consumption in 2021-2022. The World Bank Group states that 11.20% of Australia’s energy mix in 2020 was produced by renewables, while Our World in Data indicates that 14.8% of primary energy consumption in 2021 came from renewables.
DCCEEW provides detailed information on how energy is produced, consumed, and flows through the domestic system. Their infographic presented below (Figure 1) demonstrates how renewable energy – consisting of hydro, wind, solar, biofuels and biogas, bagasse, and wood – supplied 511 of the 19,110 (2.7%) Petajoules of energy produced in 2021-2022. While the vast majority of this production was exported 15,623 PJ), renewables made up 8.87% of the remaining 5,762 PJ used domestically.
Figure 1: Australian Energy Flows 2021-22 (Petajoules). Source: Australian Energy Statistics 2021-22 AEU Energy Flows.pdf
Over the last decade, renewable energy production and consumption have slowly increased in Australia. This has largely replaced the slowly decreasing use of coal, although gas consumption has also been slowly increasing, as shown by Our World in Data figures below (Figure 2).
Figure 2: Australian energy consumption by source 2004-2023. Sourced Australia: Energy Country Profile – Our World in Data
Solar energy has grown rapidly since around 2018, achieving 6.99% of the energy mix by 2023. However, as shown in the Our World in Data figure below (Figure 3), this pales in comparison to the growth of gas, which constituted only slightly less of the energy mix (23.99%) than coal (25.05%). This dependency on gas has been consolidated over time as a result of misinformation around the role of gas in the energy transition despite Australia’s world-leading supplies of renewable resources.
Figure 3: Share of Australian energy consumption by source 1965-2023. Sourced Australia: Energy Country Profile – Our World in Data
The greatest increase in renewable energy consumption has occurred in electricity generation, with renewable energy in this sector growing from 90.6 PJ to 334.3 PJ since 2008-09. However, this has been offset by declines in the use of renewable energy in mining and transport and negligible change in the use of renewable energy in the commercial, construction, agriculture, gas supply, residential, or water and waste sectors.
Figure 4: Australia’s renewable energy consumption 2008-2022 by sector. Source Australian Energy Update, Table R, Data available at Australian Government
Although renewable energy remains a small section of Australia’s overall energy production mix, it has quadrupled from 17.6 terawatt hours (TWh) in 2000 to 70.3 TWh in 2021. Various new policy instruments, such as renewable energy zones and increased clean energy funding, are being implemented to support this growth over the long term. The Australian Energy Market Operator forecasts that renewable energy should account for 83% of the energy mix in the largest grid supplying the eastern states by 2030. Advances such as developing off-shore wind zones and large-scale auctions of wind and solar capacity provide grounds for hope that this figure may be achieved.
Yet despite these ample renewable energy resources, Australia continues to struggle to meaningfully transition from fossil fuel dependency to zero emissions energy production. While the country now has a legislated net zero emissions by 2050 target and 2030 Nationally Determined Contributions of 43% reduction in emissions by 2030 (from 2005) levers, it is unclear how existing policy mechanisms will be implemented in practice actually to achieve these goals. The pace of coal generation retirement is unclear, while uncertainties around generation and storage flexibility, workplace and supply chain needs, and community acceptability remain unresolved. The recent promotion of a nuclear industry by the right-leaning opposition party – despite existing bans on nuclear development in some states – and ongoing stoking of small sections of anti-renewable community sentiment continue to foster policy uncertainty. These factors may further delay the transition to a clean energy system nationwide.
Various stakeholders have proposed numerous pathways for accelerating the transformation of clean energy. Manufacturing and energy industry leaders have called for a transformative national policy to develop extensive new energy, battery, and transmission infrastructure connecting renewable energy supplies to industrial hubs. Multiple stakeholders, including international agencies, call for an immediate moratorium on all new fossil fuel developments. Finally, policy uncertainty continues to plague Australia’s ability to grasp the environmental, social, and economic benefits of the clean energy transition. To move forward effectively, political parties across the spectrum must unequivocally embrace renewable energy and resist the temptation to promote controversial solutions that may inadvertently prolong fossil fuel dependence. The global imperative for a rapid transition away from fossil fuels is clear. Ultimately, the full potential of the clean energy transformation can only be unlocked through a combination of evidence-based policymaking and collaborative efforts with communities. This approach will ensure that the benefits of the transition are equitably distributed and that Australia can emerge as a leader in the new energy landscape.
Post submitted by Robyn Gulliver, Australia Country Manager.