Renewable energy in Australia is based mainly on biomass, solar, wind, and hydro generation technologies. Over a third of all electricity generated in Australia is now from renewable sources, a proportion that is increasing in line with global trends .
Australia's Energy Market Operator AEMO reports the nation could phase out coal power before 2040.
History Australia has large fossil fuel reserves, and most states historically developed an energy network heavily reliant on coal. However, in Tasmania, the first hydro-electric scheme began producing electricity as early as 1916.
Hydro Tasmania is now the main energy provider in that state.
In mainland Australia, large-scale projects such as the Snowy Mountains Hydro Scheme have produced renewable energy since the 1950s.
Australian researchers at UNSW set up the first solar research lab in 1974, and developed the world's first solar cell in 1981. UNSW student Dr Zhengrong Shi started the first solar panel manufacturing company in China in 2001.
Small-scale solar projects such as the Rainbow Power company began producing energy for local Australian consumers in the 1980s.
Recent growth Renewables accounted for close to 40% of Australia's total electricity supply as of 2024. Wind and rooftop solar energy in particular have grown since 2010. Australia now boasts the highest uptake of rooftop solar in the world.
The growth in large-scale renewable energy has been stimulated by recent government energy policy in order to reduce Australia's greenhouse gas emissions and increase energy security.
The Australian Renewable Energy Agency (ARENA) was established as an independent government agency in 2012 to improve the competitiveness of renewable energy technologies and to encourage innovation in the industry.
Pros and cons of various types of renewable energy are being investigated, and more recently there have been trials of green hydrogen and wave power.
Australia ratified the Kyoto Protocol in 2007, and in 2016 became a party to the Paris Agreement, an international agreement that binds member countries to reduce the greenhouse gas emissions responsible for climate change. IPCC reports show parts of Australia are at real risk from climate change.
, renewable energy is seen as a good investment; many companies now operate in Australia, including BP Solar, Eurosolar, Hydro Tasmania, Origin Energy, and Pacific Blue.
Government policy
As in many other countries, renewable energy in Australia has been encouraged by government energy policy to limit climate change, reduce oil import dependency, and stimulate the economy.Poddar, S., Evans, J.P., Kay, M. et al. Assessing Australia's future solar power ramps with climate projections. Sci Rep 13, 11503 (2023).Poddar, S., Evans, J. P., Kay, M., Prasad, A., Bremner, S.Estimation of future changes in photovoltaic potential in Australia due to climate change. Environmental Research Letters 2023. 16 (11): 114034
A 2019 article raised concerns about environmental sustainability for future generations, as it seemed that the then federal government had no renewable energy policy beyond the year 2020. The Liberal Party's energy minister, Angus Taylor, stated that the government would not be replacing the Renewable Energy Target (RET) after 2020.
International agreements Australia ratified the Kyoto Protocol in December 2007 under the then newly elected Prime Minister Kevin Rudd. Evidence suggests Australia will meet its targets required under this protocol. Australia had not ratified the Kyoto Protocol until then, due to concerns over a loss of competitiveness with the US, which also rejects the treaty.Australian Government (2004). Securing Australia's Energy Future
In December 2016, Australia became a party to the Paris Agreement, an international agreement which binds member countries to address climate change, and started submitting emissions reduction commitments (NDCs).
Renewable energy targets A key policy encouraging the development of renewable energy in Australia are the mandatory renewable energy targets (MRET) set by both Commonwealth and state governments.
An Expanded Renewable Energy Target was passed with broad support by the Australian Parliament on 20 August 2009, to ensure that renewable energy achieves a 20% share of electricity supply in Australia by 2020. To ensure this the Federal Government committed to increasing the 2020 MRET from 9,500 gigawatt-hours to 45,000 gigawatt-hours. The scheme was scheduled to continue until 2030.Australian Government: Office of the Renewable Energy Regulator This target has since been revised with the Gillard government introducing in January 2011 an expanded target of 45,000 GWh of additional renewable energy between 2001 and 2020.
The MRET was split in 2012 into a small-scale renewable energy scheme (SRES) and large-scale renewable energy target (LRET) components to ensure that adequate incentive exists for large scale grid connected renewable energy. A number of states have also implemented their own renewable energy targets independent of the Commonwealth. For example, the Victorian Renewable Energy Target Scheme (VRET) mandated an additional 5% of Victoria's "load for renewable generation", although this has since been replaced by the new Australian Government LRET and SRES targets. South Australia achieved its target of 20% of renewable supply by 2014 three years ahead of schedule (i.e. in 2011) and has subsequently established a new target of 33% to be achieved by 2020.
Australia's climate goal includes reducing emissions by 43% by 2030, aiming for 82% of its electricity to come from renewable sources, aligning with the Australian Energy Market Operator's (AEMO) forecast of 83% renewables in the National Electricity Market by the same year. This effort is supported by individual targets and initiatives from states and territories, and the National Energy Transformation Partnership, established in August 2022.
Government bodies and mechanisms Australian Renewable Energy Agency (ARENA)
ARENA was established by the Australian Government on 1 July 2012. The purpose of ARENA is to improve the competitiveness of renewable energy technologies and increase the supply of renewable energy through innovation that benefits Australian consumers and businesses. Between 2012 and January 2021, ARENA supported 566 projects with in grant funding.
Carbon pricing
In 2012, the Gillard government implemented a carbon price of $23 per tonne () to be paid by 300 liable entities representing the highest business emitters in Australia. The carbon price will increase to $25.40 per tonne by 2014–15, and then will be set by the market from 1 July 2015 onwards. It was expected that in addition to encouraging efficient use of electricity, pricing carbon will encourage investment in cleaner renewable energy sources such as solar and wind power. Treasury modelling has projected that with a carbon price, energy from the renewables sector is likely to reach 40 per cent of supply by 2050. Analysis of the first 6 months of operation of the carbon tax showed that there had been a drop in carbon emissions by the electricity sector. There had been a change in the mix of energy over this period, with less electricity being sourced from coal and more being produced by renewables such as hydro and wind power. The government at the time presented this analysis as an indicator that their policies to promote cleaner energy were working.
The carbon pricing legislation was repealed by the Tony Abbott-led Australian Government on 17 July 2014. Since then, carbon emissions from the electricity sector have increased.
Clean Energy Finance Corporation (CEFC)
The new $10B Clean Energy Finance Corporation (CEFC) was created by the government in 2012, with the goal of overcoming barriers to the mobilisation of capital by the renewable energy sector. It was intended to make available $2B a year for five years for the financing of renewable energy, energy efficiency, and low emissions technologies projects in the latter stages of development. The fund was expected to be financially self-sufficient.
By the end of 2022, the CEFC had investments totalling around $11B, and had financed 42 wind and solar projects, which added 2.1 GW of solar and 1.5 GW of wind capacity. In 2022, as part of the "Rewiring the Nation" initiative, the Australian Government approved a capital increase of $11B for the CEFC, its first since the corporation's inception. As of 2022, the CEFC had facilitated over $38.65B in clean energy investments.
Renewable Energy Certificates Registry The Renewable Energy Certificates Registry (REC-registry) is an internet-based registry system that is required by the Australian Renewable Energy (Electricity) Act 2000. The REC-registry is dedicated to: maintaining various registers (as set in the act); and facilitating the creation, registration, transfer and surrender of renewable energy certificates (RECs).
Feed-in tariffs
Feed-in tariffs have been enacted on a state-by-state basis in Australia to encourage investment in renewable energy by providing above commercial rates for electricity generated from sources such as rooftop photovoltaic panels or wind turbines. The schemes in place focus on residential scale infrastructure by having limits that effectively exclude larger-scale developments such as wind farms. Feed-in tariffs schemes in Australia started at a premium, but have mechanisms by which the price paid for electricity decreases over time to be equivalent or below the commercial rate. As of 2011, all the schemes in place in Australia were net schemes, whereby the householder is only paid for surplus electricity over and above what is actually used. In the past, New South Wales and the Australian Capital Territory enacted gross schemes whereby householders were entitled to be paid for 100% of renewable electricity generated on the premises, however these programs have now expired. In 2008 the Council of Australian Governments (COAG) agreed to harmonise the various state schemes and developed a set of national principles to apply to new schemes. Leader of the Australian Greens, Christine Milne, advocated a uniform national gross feed-in tariff scheme. Each state and territory of Australia offers a different policy with regards to feed-in tariffs.
Solar Sunshot program The Solar Sunshot program, announced by prime minister Anthony Albanese in March 2024, is a $1B fund that delivers grants and production credits to manufacturers of solar panels, to increase the number made in Australia. (As of March 2024, 99% are imported.) The scheme will be run by ARENA. Provision will also be made to manufacturers of other components needed to create renewable energy, and the scheme is part of a plan to provide jobs for those workers currently employed in the coal industry. The new industries will be created in Portland and the Latrobe Valley in Victoria, and Wollongong and the Hunter Region in NSW.
Subsidies to fossil fuel industry