A watershed moment: renewables surpass coal in Australia
In a landmark shift for the energy market, renewables have overtaken coal as Australia’s leading source of electricity. The Guardian’s report highlights that, for the first time, solar, wind, hydro, and bioenergy combined now power more of the grid than coal. This transition reflects a rapid expansion of clean energy capacity, falling technology costs, and evolving policy support that has accelerated retirements of older coal plants.
The September 2025 data point — 9.24 terawatt hours generated from renewable sources — underscores a broader trend: reliability and capacity are improving as the share of variable renewables grows. While coal once defined Australia’s electricity geography, the current mix demonstrates a structural shift toward lower-emission generation, diversified by geography and resource endowment across states.
What’s behind the shift?
Several factors are driving this transition. First, investment in solar and wind infrastructure has surged, driven by cost declines, favorable policy signals, and growing demand for lower electricity prices. Second, hydropower and bioenergy add baseload and flexibility, helping smooth fluctuations in wind and solar output. Third, grid modernization — including better transmission capabilities and grid-scale storage pilots — improves reliability as renewables share increases.
Policy environments and market reforms are also playing a crucial role. Renewable energy auctions and incentives have lowered the levelized cost of electricity, encouraging developers to bring online new capacity. At the same time, coal-fired plants are facing retirement or repurposing pressures as emissions targets tighten and finance providers reassess risk around long-term coal investments.
Implications for prices, reliability, and consumers
As renewables command a larger slice of the energy mix, electricity prices can become more competitive, though the transition introduces new dynamics. Price volatility may rise in the short term due to variability in wind and sun, but this can be mitigated by storage, demand response, and a more interconnected grid. Consumers could benefit from lower average prices over time as renewable technologies mature and economies of scale grow.
Reliability remains a critical consideration. Australia’s grid operators are adapting to the evolving mix by enhancing forecasting, transmission capacity, and demand-side participation. The growing portfolio of energy sources helps reduce dependence on any single fuel and can improve resilience against price shocks tied to global fuel markets.
Regional differences and future outlook
Different states contribute to the renewables surge in unique ways. Regions with abundant sun and wind are expanding capacity rapidly, while transmission upgrades connect these resources to demand centers. In addition, policy signals at the federal and state levels will influence the pace of retirement for older coal assets and the deployment of new storage and peaking capacity.
Looking ahead, the energy mix is likely to become even more diverse. Hydrogen-ready infrastructure, more high-efficiency solar installations, and longer-duration storage could further stabilize prices and electricity availability. The overarching trend remains clear: Australia is transitioning toward a more sustainable, lower-emission electricity system, while balancing reliability and affordability for consumers.
What this means for businesses and policymakers
For industry players, the shift opens opportunities in solar and wind development, grid modernization, and energy management services. Utilities may explore business models that blend renewables with flexible generation and storage to maintain reliable supply. Policymakers can build on the momentum with targeted incentives, stronger transmission planning, and clear long-term decarbonization roadmaps to sustain investment confidence.
Overall, the first major milestone — renewables overtaking coal in Australia — signals a practical transition from aspiration to execution. The energy landscape is changing, and the implications will reverberate through prices, investment, and climate commitments for years to come.
