Australia Energy Transition Market Trends and Analysis by Sectors and Companies Driving Development

Summary

The Australian government has significantly increased its emissions reductions targets, with the 2022 Climate Change Act legally committing the country reducing its emissions by 43% (relative to a 2005 baseline) by 2030 and reaching net-zero by 2050. However, while the country has significantly increased its renewable capacity in recent years, sectors such as hydrogen, electric vehicles, renewable fuels, and CCUS remain in a relatively early stage of development. A large increase in renewable capacity has decreased the country’s reliance on thermal resources, so that thermal power contributed to 69% of power generation in 2022, compared to 83% in 2018. In 2035 solar will be the dominant power source, accounting for 41% of generation, followed by wind power at 22%. The uptake of electric vehicles has been relatively slow in Australia, with electric vehicles accounting for just 2% of the light vehicle segment in 2018. However, the coming years will see a strong increase in adoption in the coming years, so that BEVs will account for 69% of light vehicles by 2035. Meanwhile, Australia is currently a minor player in the renewable fuels space, with no active renewable refineries. Although its pipeline of projects will give a renewable fuel production capacity of 670mmgy by 2026. Despite hosting the Gorgon project, one of the largest CCUS facilities in the world, there are currently no other projects in the pipeline. Furthermore, the scrapping of its Carbon Capture, Use and Storage (CCUS) Hubs and Technologies grant scheme will cause confidence in this technology to fall. Australia’s hydrogen market is also in an early stage of development, with only 13 ktpa of low carbon hydrogen production capacity in 2022. However, a number of large-scale projects are expected to come online by the end of the decade, which will significantly boost production.

Despite historically relying on thermal sources such as coal and natural gas to fulfil the majority of its energy demand, Australia’s energy transition is starting to gain pace. The country’s renewable capacity has increased dramatically in recent years. As a result, the power capacity share of renewable energy is expected to overtake thermal sources in 2028. However, although the country’s electric vehicle, CCUS, and hydrogen markets are also expected to experience growth, this will take place at a much slower rate. Insufficient policy incentives will hamper EV adoption and the ability of more emerging technologies to reliably reach commercial scale.

Key Highlights

• Renewable power capacity share is expected to strongly increase in the coming years. As a result, renewables will overtake thermal in the power capacity share in 2028.
• By individual technology, solar PV will have the largest share of power capacity, alone accounting for 58.7% in 2035 after experiencing a strong CAGR of 12.4% between 2023 and 2035.
• While coal previously accounted for 60% of generation in 2018, the coming year will see its share in the power generation mix rapidly decline, with a negative CAGR of -6.5% between 2023 and 2035. Despite this rapid turnaround and Australia’s renewable energy aspirations, coal will still retain 14.6% share of power generation in 2035.
• Adoption of electric vehicles in Australia is expected to increase strongly between now and 2030, so that electric vehicles will account for 69% of light vehicle ownership.
• With no active renewable refineries, Australia currently has a low standing within the renewable fuels market. Although NSW and Queensland have their own biofuel polices, Australia lacks a federal biofuel mandate, which has arguably undermined business confidence.
• The bulk of Australia’s CCUS projects are in the feasibility stage and account for a maximum carbon capture capacity of 27.5mtpa.
• Australia’s 2023/24 budget sets aside over $2 billion for the nation’s renewable hydrogen industry.

Scope

• Current leaders within Australia’s Energy Transition
• Renewable Energy Policies and Economics
• Power Capacity Share Outlook
• Power Generation Share Outlook
• Renewable Generation Share by Country, 2020 - 2035
• Thermal Power: Decommissioning and Emissions
• Major Players in Renewable Power
• Electric Vehicle Production Forecasts for Australia and EV’s Share of Light Vehicles
• Electric Vehicles Policies and Support
• Upcoming Renewable Refineries in Australia
• Renewable Fuels Outlook
• Renewable Fuels Policies and Support
• CCUS capacity, 2020 - 2030 and Share by End Use Sector
• CCUS Policy
• CCUS Projects
• National Hydrogen Strategies of Canada and the US
• Hydrogen Capacity, 2020 - 2030
• Case Studies of Hydrogen End Use Sectors

Reasons to Buy

• Obtain the most up to date information on recent developments and policies for Australia’s energy transition.
• Identify opportunities in upcoming projects involving electric vehicles, solar and wind power generation, EVs, CCS and hydrogen production in Australia.
• Assess competitors based on their active and pipeline capacities for renewable energy generation, CCS/CCU projects and hydrogen projects
• Develop business strategies by identifying the most promising sectors for future growth