2024 was a microcosm of the challenges – and opportunities – facing the energy transition in the 21st Century.
"While investments in large-scale renewables and battery storage picked up steam, the road to net zero was paved with infrastructure bottlenecks and reliability concerns."
Lingering energy crises, cost-of-living pressures and geopolitical uncertainty compounded the urgency to modernise the grid. Analysts warned Australia – and the world – is unlikely to reach net zero by 2050 under current pathways.
2024 was the year the industry recognised the need to secure social license, with affordability and consumer protection emerging as a pressing challenge.
With Trump’s imminent return to the White House – given his plan to ‘Drill, baby, drill!’ – APAC is poised to benefit from clean energy capital scouting beyond the US and Australia may provide fertile ground.
Origin CEO Frank Calabria summed it up: “The global energy transition presents enormous opportunity for Australia to be a leading economy in decarbonisation.”
Last year saw coal generation in steady decline. The Australian Energy Market Operator (AEMO) reported renewables contributed over 40% of generation with peaks surpassing 75%.
Despite coal supplying 60% of electricity, renewables are accelerating to offset the imminent retirement of aging coal assets.
In September, potential renewable generation hit 100% twice, AEMO reported.
By the end of that month, 45.6 GW of generation and storage capacity was in progress – 70% of the National Electricity Market (NEM) total generation capacity – a 36% rise compared to the same period last year.
Momentum is building, and optimism is palpable.
“We expect this momentum to continue in 2025, along with support for optimising consumer energy resources to contribute to energy reliability and grid security, benefiting all energy users,” AEMO said.
The market operator said more investment “in new generation and storage projects, transmission and enabling consumers’ rooftop solar, batteries and electric vehicle to support a secure and reliable power system is needed to improve reliability.”
Driving this surge are key players like EnergyAustralia’s large-scale battery projects and power purchase agreements backed by the federal Capacity Investment Scheme, and Origin Energy’s $1.7 billion commitment to battery storage and renewables targeting 4-5 GW by 2030.
Renewables expansion hinges on one critical element – transmission infrastructure.
Origin and AEMO said deployment remained a priority, with both stressing the need for speed.
“Industry and government must work together with communities to address this challenge,” said Calabria.
The Australian Energy Regulator (AER) approved the next stage of Transgrid’s HumeLink – key to grid resilience and connecting renewable energy zones. AER pledged continued scrutiny of project costs to protect consumers.
Gas-fired peaking plants, pumped hydro, and large-scale batteries continued to play a role in stabilising Australia’s grid, though gas as a transition fuel remains contentious.
AEMO flagged supply variability and rapid ramping events as key technical and engineering challenges for achieving a 100% renewable grid.
Balancing this volatility calls for innovation and agility.
“Rebuilding the power system is both complex and challenging,” AEMO said.
Integrating renewables while maintaining a stable and secure energy system requires innovation.
“Expertise and commitment to solutions will be critical,” AEMO said. “A successful transition… will need a collaborative effort.”
EnergyAustralia transition executive Ross Edwards echoed this: “The speed of the energy transition has been nothing short of remarkable… we face the challenge of balancing the need to invest in new renewable energy projects while maintaining the reliability and affordability of our existing systems.”
2024 saw nuclear plans floated by the Coalition – with a $331 billion price tag.
Critics, including the Clean Energy Investor Group (CEIG) and Climate Energy Finance (CEF), cited CSIRO's GenCost report ranking nuclear as the most expensive option – twice the cost of renewables.
Nevertheless, public support grew to 61% with a surprising split along gender lines – Lowy Institute found higher support among men (72%) than women (51%).
"While nuclear captured headlines, hydrogen cautiously edged forward."
Despite CSIRO projecting a $1.7 billion opportunity in electrolyser manufacturing and Canberra’s $8 billion lure, private investment hesitated.
Origin exited its $207 million Hunter Valley Hydrogen Hub, citing market development uncertainties and technological hurdles.
Still, pilots like BlueScope’s hydrogen trials saw progress.
Community engagement rose to the fore, with AEMO flagging significant risks if market and policy settings, social licence and supply chain issues are not addressed.
The energy regulator said it would zero in on consumer protections.
EnergyAustralia’s Community Battery Ease and Origin’s renewable storage expansion led efforts to deliver equitable solutions.
“We must find the right balance of affordability and security of supply… or we risk losing community support,” Calabria acknowledged.
Adding another layer, Indigenous engagement rose in importance with a focus on Free, Prior and Informed Consent (FPIC). March saw the $3 billion East Kimberley Clean Energy Project receiving $1.6 million from the Australian Renewable Energy Agency for a feasibility study on green hydrogen and ammonia export. In December, Canberra launched the First Nations Clean Energy Strategy.
Meanwhile, ‘greening’ the workforce became pressing, with the Future Made in Australia policy complemented by a $91 million public investment for workforce upskilling.
The pace of transition is expected to intensify as we kick off the new year. EnergyAustralia’s Ross Edwards sums it up: “Looking to 2025, the pace of change will only accelerate. The global shift towards decarbonising energy systems is gaining momentum, and Australia is no exception.”