2024 energy projections: Australia’s future power outlook

At a glance

• Australia’s Shift from Traditional Powerhouses to Green Energy Dominance
• Government Initiatives and Technological Breakthroughs Propelling the Nation Towards a Cleaner Energy Future
• Consumer Empowerment and Smart Technologies Driving Sustainable Choices

 

Australia, in the year 2024, stands at the crossroads of a dynamic and transformative era in its energy landscape. The nation’s power sector is poised for significant changes, driven by a complex interplay of factors ranging from technological advancements and government policies to shifting consumption patterns.

In this comprehensive exploration, we will delve into 2024 energy projections, trends, and developments that promise to shape Australia’s energy future.

 

Current Status and Challenges

 

Analysis from the International Energy Agency (IEA) indicates that Australia has made strides in energy efficiency, particularly in industry and services, driven by disclosure regimes, labelling, and efficiency standards. However, the period between 2015 and 2019 witnessed a slowdown in annual improvement rates, calling attention to the imperative of accelerating efforts. Transport and residential buildings emerge as focal points for achieving greater productivity potential.

 

The government acknowledges the importance of stricter standards and policies, as seen in the proposed National Electric Vehicle Strategy and revisions to the National Construction Code. These measures are pivotal in achieving the NEPP targets, as highlighted by estimates projecting a 53% improvement by 2030 if implemented Effectively.

 

Australian Capital Territory

 

The Australian Capital Territory (ACT) leads in renewable energy, with 23% using solar PV, all households having battery storage, and a 100% renewable generation capacity. Despite a small population, the ACT focuses on innovation and plays a crucial role in clean energy research.

It heavily relies on energy imports but invests in renewables to offset non-renewable consumption. Challenges include retiring thermal generators’ impact and high environmental costs in consumer bills.

Despite being at the forefront of the renewable transition, consumers in the ACT should consider these challenges when comparing energy providers and plans.

 

Queensland

 

Queensland is a leader in renewable energy, with 39.6% using solar PV and 39% utilising battery storage. The state is transitioning with 44 large-scale renewable projects, focusing on solar technology. Closure of the Callide B coal-fired generator signals a shift towards intermittent renewables, prompting transmission upgrades like the Queensland-NSW Interconnector.

Government-led initiatives have historically lowered prices, making Queensland a net energy exporter, despite challenges of falling demand during the day. To compare energy providers, electricity plans, and gas plans in QLD, consumers should consider the state’s surplus capacity and ongoing infrastructure upgrades.

 

South Australia

 

South Australia (SA) leads in renewable energy, with 38.5% using solar PV and 58% with battery storage. The focus on growth technologies, such as hydrogen and virtual power plants, enhances storage and flexibility.

SA faces challenges in managing minimum demand during the transition to asynchronous renewables, emphasising the need for commercial viability. Despite reliance on gas and high retail prices, the EnergyConnect interconnector in 2024–25 aims to improve reliability and reduce costs.

To compare energy providers, electricity plans, and gas plans in SA, consumers should consider these challenges and ongoing infrastructure projects.

 

Northern Territory

 

In the Northern Territory (NT), 24.3% use solar PV, and 19% have battery storage. Challenges include limited visibility and the upcoming decommissioning of 183 MW of gas-fired generation, requiring better integration of consumer-owned units. The NT Electricity Market (NTEM) needs redesign for expanding renewables, urging timely reforms to address inefficiencies and manage increased solar generation.

Isolated networks lack formal reliability standards. When comparing energy providers and plans in NT, consumers should consider these challenges and potential reforms in the evolving energy landscape.

 

Victoria

 

Victoria faces energy challenges, with 21.1% using solar PV, 56% having battery storage, and 65% of Australia’s residential gas use. AEMO predicts a reliability breach in 2028-29, requiring new large-scale generation via the REZ Development Plan. Early closure of Yallourn Power Station in 2028 disrupts the supply mix. Rooftop PV uptake may turn minimum demands negative by 2028-29, requiring solutions like the Energy Upgrades Program.

With 4,820 MW of retiring coal-fired generation in 30 years, Victoria prioritises new generation, demand flexibility, and unique energy policies. Consumers in VIC should consider these challenges when comparing energy providers and plans in the dynamic energy landscape.

 

Western Australia

 

In Western Australia (WA), 33.4% have solar PV, 34% own battery storage, emphasising the commitment to Distributed Energy Resources (DER) integration through Project Symphony for affordability and reliability. Managing the rising impact of solar PV on reliability during peak demand is crucial, given WA’s independent energy system.

Despite no legislated renewable target, WA envisions roles for coal, gas, DER, and hydrogen in decarbonisation. Investigating alternatives like stand-alone power systems and microgrids addresses the reliability challenges of the geographically dispersed system.

Consumers in WA should consider these unique challenges and ongoing DER integration initiatives when comparing energy providers and plans.

 

Tasmania

 

In Tasmania, 16.3% have solar PV, 89% own battery storage, and renewable energy dominates. The state aims for 1.4 GW of new Variable Renewable Energy (VRE) by 2040, utilising projects like Marinus Link and the Battery of the Nation to export excess energy. Hydro power supplies 80%, but challenges arise during low rainfall.

Tasmania aspires to be a net exporter, emphasising cost management. Challenges include a lack of retail competition, high residential energy use, and the need for innovation by regulated retailers in demand flexibility.

To compare energy providers and plans in Tasmania, consider these challenges and ongoing initiatives.

 

New South Wales

 

New South Wales (NSW) faces a 154 MW reliability gap in 2024, addressed by the 220 MW support from the Emerging Energy Program. Despite renewable strides, retiring power stations create challenges. Dependence on imports and potential over-investment prompt interventions like the Electricity Infrastructure Road map and Peak Demand Reduction Scheme.

Initiatives such as Solar for Low Income Households, Energy Savings Scheme, and Empowering Homes promote renewable energy adoption. Programs like Regional Community Energy and Net Zero Industry support regional projects.

Consumers should consider these interventions and evolving energy landscape initiatives when comparing energy providers and plans in NSW.

 

Commonwealth

 

At the Commonwealth level in Australia, 29% of households have solar PV, and 34,033 battery systems have been installed since 2014. In 2019, renewables contributed to 24% of electricity generation.

Commonwealth policy focuses on market-owned generation assets, while state-level policymakers implement consumer-focused initiatives. The energy transition aims for a net-zero carbon-intensive system and a decentralised, consumer-centric model. Challenges include securing a reliable energy supply with increased reliance on Variable Renewable Energy.

Jurisdiction-specific reforms address diverse state pressures, emphasising the balance of supply and demand through new supply procurement and demand-side management. Total energy exports in 2018-19 reached 15,911 PJ, reflecting the dynamic nature of Australia’s evolving energy landscape at both levels of government.

 

Looking Ahead: Energy Market Predictions and Analysis

 

Looking into the future, Australia’s energy market is poised for significant transformations based on current trends and future projections.

 

National Energy Productivity Plan (NEPP) and Targets

 

At the heart of Australia’s energy ambitions is the National Energy Productivity Plan (NEPP). Jointly formulated by the Australian Government and states/territories, NEPP commits to a 40% improvement in energy productivity from 2015 to 2030. This plan serves as a roadmap to align the nation’s energy objectives with global sustainability goals, emphasising the need for enhanced energy efficiency across various sectors.

 

Economic Impacts and Energy Bills

 

Amid these endeavours, the economic landscape comes into sharp focus. The Department of the Treasury forecasts a substantial increase in electricity and gas prices, necessitating a strategic approach to mitigate the impact on households and businesses.

The Australian Competition and Consumer Commission (ACCC) confirms significant jumps in electricity bills, underscoring the urgency of addressing energy poverty. The government’s commitment to reducing consumer energy bills by AUD 275 per household by 2025 aligns with broader efforts to enhance energy efficiency and affordability.

The IEA’s Energy Efficiency Market Report reinforces the idea that a more efficient home and car can lead to substantial energy bill savings, offering a tangible benefit to consumers amid rising energy costs.

 

Renewable Energy: The Dominant Force

 

 

Australia’s renewable energy sector has experienced remarkable growth, meeting incremental electricity demand over the past decade. The Commonwealth Large-scale Renewable Energy Target and state-based auctions have played a pivotal role in quadrupling renewable electricity generation between 2000 and 2021.

In 2021 alone, renewable production surged by 10%, primarily attributed to the rapid expansion of solar and wind energy sources. Solar photovoltaics, in particular, have seen substantial growth, with one in three households boasting solar PV installations.

Remarkably, renewable energy contributed to 29% of Australia’s total electricity generation in the same year, marking the highest percentage on record. Moreover, emissions in the year leading up to June 2022 were 21.6% below the levels recorded in the baseline year of 2005.

Projections by the IEA suggest an 85% expansion in Australia’s renewable energy capacity by 2027, reaching 40 gigawatts. The emphasis on renewable energy aligns with the Australian Government’s ambition to achieve 82% renewables in the national electricity mix by 2030. However, challenges remain, including the need for grid development and community engagement, especially in the context of coal retirements.

 

The Diminishing Role of Fossil Fuels

 

Traditional Powerhouses: Coal and Gas Dynamics

 

For decades, coal and natural gas have been the stalwarts of Australia’s energy sector, providing a reliable foundation for industrial growth and domestic power consumption. However, the landscape is evolving as environmental concerns prompt a revaluation of these carbon-intensive sources.

 

Technological Advancements: Leading the Charge

 

Technological innovation is at the forefront of Australia’s renewable energy surge. Breakthroughs in solar panel efficiency, advancements in wind turbine technology, and strides in battery storage are fundamentally altering the energy landscape. These innovations not only drive the shift towards renewable sources but also redefine how energy is generated, stored, and distributed.

 

Economic Viability and Consumer Choice

 

The economic viability of renewable energy is increasingly making it an attractive option for consumers and businesses alike. Declining costs of renewable technologies, coupled with rising prices for traditional energy sources, are influencing choices towards greener alternatives. As consumers become more environmentally conscious, the demand for sustainable energy options is expected to surge.

 

Government Commitment to Net Zero

 

Australia’s commitment to a sustainable future is further exemplified by the government’s firm stance on transitioning the nation to net-zero emissions.

Enshrined in law are ambitious targets, including a 43% reduction in greenhouse gas emissions from 2005 levels by 2030 and achieving net-zero emissions by 2050.

The government has adopted a holistic, whole-of-government approach involving substantial investments across various sectors.

 

Compare Energy Providers in Different Regions with Select and Switch.

 

Government Investment and Priorities

 

To support this commitment, the Australian Government has allocated a substantial investment of $24.9 billion over the current decade. This investment aims to address climate change and transform Australia’s energy sector.

The focus is on shifting the country’s electricity generation to mainly use renewable sources, promoting the growth of clean energy industries, and helping existing industries and transportation reduce their carbon emissions.

This financial commitment provides a clear road map for the nation’s sustainable future and instils confidence for businesses to invest in new opportunities within the evolving energy landscape.

 

Government Initiatives and Funding

 

To bolster the transition to cleaner energy, the Australian Government has launched several initiatives and allocated significant funds.

This plan includes several important initiatives. The Powering Australia Plan involves a significant budget to help meet emissions targets. The Rewiring the Nation initiative offers affordable financing to update Australia’s electricity grids.

The Powering the Regions Fund supports the reduction of carbon emissions in existing industries. The National Reconstruction Fund contributes up to A$3 billion to support manufacturing in renewables and the use of low-emissions technologies.

Moreover, the government is investing in clean energy technologies and infrastructure. This includes regional hydrogen hubs, community solar batteries, and electric vehicle charging stations, all of which are crucial components of the government’s overall strategy.

 

Australia’s Thriving Clean Energy Environment

 

Australia’s clean energy sector is thriving thanks to a strong innovation ecosystem, which includes research expertise, funding bodies, and regulatory support. Successful ventures, like Enel Green Power’s solar power plant investment and Nyrstar’s electrolysis plant project, demonstrate the appeal of investing in renewable energy in Australia.

The nation’s commitment to developing a skilled clean energy workforce is evident through initiatives like “Skilling the Clean Energy Workforce,” aiming to create 10,000 new energy apprenticeships.

 

Global Collaboration

 

Australia’s commitment to a sustainable future extends globally, exemplified by the Green Economy Agreement signed with Singapore in 2022. This agreement facilitates trade and investment in green goods and services, promotes collaboration between businesses, and fosters harmonisation of standards to enhance market interoperability.

 

Conclusion: Australia’s Future Power Outlook

 

In conclusion, Australia stands at the threshold of a sustainable energy future, driven by a commitment to environmental responsibility, economic viability, and energy security. The energy projections for 2024 reveal a nation in the midst of a profound transition, with renewable energy emerging as a dominant force. Government policies, technological innovations, and changing consumer preferences are shaping the trajectory of Australia’s energy market.

 

Australia’s move towards significantly reducing carbon emissions in its power generation by 2030 demands thoughtful planning, changes to the market, and a united effort to involve communities, ensuring a fair and people-focused transition. In facing these challenges, having a clear, well-funded national energy and climate information system is crucial. This system helps monitor progress and provides guidance for future actions.