Australia’s renewables transition is well under way – but meeting its 2030 target will be ‘extremely challenging’

The challenges of Australia’s energy transition – from a system once fired by coal and gas to one powered by solar, wind and supporting technologies – are being underlined on an almost weekly basis.

On Tuesday, the Carroll Labor government in Victoria announced a review of the Western Renewables Link, a major transmission line due to be completed in 2029, only days after scrapping one of its renewable energy zones. And, if there’s a change of government at the state election in November, the Coalition is expected to go further.

Queensland moved ahead with plans for the nation’s largest datacentre, having rejected the federal government’s push to power the industry with renewables.

It means that, while from one perspective the shift to clean energy is well under way, with about half the electricity in the main grid supplied by renewables, the next stage could be even more demanding. It’s left some questioning whether the country can still reach the Albanese government’s target of 82% renewable energy by 2030.

The 82% figure wasn’t meant to be a target – it started as a projection of what was possible before Labor was elected in 2022, but morphed into a national goal in the months afterwards. At the time wind, solar and hydro made up a third of the country’s electricity.

Back then, the target was ambitious, but would have been achievable with sustained effort and investment, says Dr Dylan McConnell, an energy systems researcher at the University of New South Wales.

But four years out from 2030, the remaining gap looms large. An additional 8.5GW of wind and 9.5GW of solar needs to be planned and built, McConnell says, drawing on data from the Australian energy market operator. In capacity terms, that’s adding more than the nation’s entire existing wind power resources, but in the next three and a half years. That’s over and above what the market operator already anticipates to come online.

“It’s an extremely challenging task. The rate of renewable energy rollout that is now required to hit that target is unbelievable,” McConnell says, and rapidly growing demand from datacentres is about to make things harder.

Tristan Edis, the director of analysis and advisory at research and analytics firm Green Energy Markets, says there’s sufficient capacity in the pipeline – already approved under planning and environmental laws – to meet the government’s 2030 target. But only about 12% of what is needed is currently under construction.

What that shows, he says, is environmental assessments aren’t the key hold up. “That’s not the predominant reason why so little is managing to get committed to construction,” he says. “The choke point is that projects aren’t able to find a customer that’s prepared to sign on to a long-term power purchase agreement such that they can get the project financed.”

Why? Edis says uncertainty about coal closure plays a big part. Two big generators – Yallourn, in Victoria’s Latrobe Valley, and Eraring, in the Hunter Valley – are scheduled to close before 2030. But past experience shows governments have a tendency to intervene to delay exit dates.

“We’re stuck in a vicious cycle where people are nervous, or lacking sufficient confidence that they’re going to let the coal close, so they don’t invest in the new renewables to replace it,” he says.

That’s coupled with insufficient policy signals to drive the new investment.

The capacity investment scheme, the government’s “cornerstone policy” for new renewable energy has been slow to deliver.

Initially designed to support batteries and other firming, in 2023 and 2025 the scope and size of the scheme was expanded to include renewables alongside dispatchable capacity – totalling 40GW – about half the current capacity of the national electricity grid.

Eight tender rounds have supported 115 projects, including 25.5GW wind and solar. But the level of financial support provided by the government means that most projects also require a contract for their electricity, before they can start building.

Those power purchase agreements haven’t been forthcoming at the rate needed to match the target, and only about 11% of the underwritten wind and solar farms have reached construction or operation, according to analysis by Green Energy Markets and the Institute for Energy Economics and Financial Analysis.

Australian Energy Council’s chief executive, Louisa Kinnear, says there’s a need for “durable and stable policy settings” including greater certainty about when coal will exit, and planning ahead for reliability and security.

“You end up in a sort of catch-22 where we know we need to stimulate investment in new generation so that coal can exit, but while coal remains in the system, prices are too low and not providing the right signal,” she says.

Chris O’Keefe, the national spokesperson for the Clean Energy Council, says recent policy changes at the state government level in Queensland and Victoria haven’t helped. “We’re seeing quite a feisty debate in Victoria, where major transmission projects – VNI West – are proposed to be cancelled by an incoming Coalition government.

“Then you’ve got the Western Renewables Link, where unfortunately the Labor government, as well as the Coalition, have said they’ll pause it.”

Delay doesn’t make projects cheaper, he says. “It’s very disappointing from an industry perspective because decisions like this don’t build the electrons and the electricity supply Victoria will need as soon as Yallourn closes (in 2028).

“We need to ensure that the goalposts don’t shift when the politics gets hard.”

A recent industry survey found 85% of renewable companies, investors and regulators said connecting to the grid was the leading risk for new projects, while 81% said approvals still remained a significant barrier.

Analysis by Net Zero Australia, a research partnership that tracks Australia’s progress on the energy transition, found renewable projects were getting larger and more complex, and taking longer to design and approve. But the rate of approval per megawatt was improving.

Prof Michael Brear, a University of Melbourne engineer and the director of the Net Zero Australia project, says it’s quicker to build a windfarm than to design and approve one. “It takes roughly eight years from first thought to turning on a windfarm, and we spend about five of those eight years designing the thing and getting it approved.”

Governments could help things go faster, he says, by mapping biodiversity and identifying parts of the country where projects could be fast-tracked and other high value nature areas that should be protected.

None of this is to say progress isn’t happening. More wind and solar was added to the grid last year than in 2024. In the final quarter of 2025, renewables generated more power than fossil fuels for the first time ever.

Governments can’t afford to take their foot off the pedal, Edis says, because renewables underpin the cuts required to meet Australia’s 62-70% emissions reduction target in 2035, as other sectors including industry, transport and buildings electrify.

The energy minister, Chris Bowen, remains confident the target can still be met, telling the Australian Financial Review: “The closer we get to it, the better the country will be.”

Despite the setbacks, O’Keefe agrees: “There’s no question it’s a challenge, but it’s doable.”

More than 70 renewable energy projects are now at financial close or under construction, he says, along with a similar number of big batteries. “We still need more, but that’s not nothing,” O’Keefe says.

It’s important not to discount what has already been achieved, he says, especially given the country’s first solar farm was switched on only 12 years ago. “I don’t think Australians realise we are halfway through the transition,” O’Keefe says.

“Yes, some of the targets are going to be challenging to meet. But that doesn’t mean you don’t strive to meet them … If you’ve half built your house, it’s a better idea to keep going.”