Australia Power Market Research On Size, Growth Trends, Segments, Regions & Competition

Australia Power Market Trends and Insights

Rapid Utility-scale Solar PV Deployment under Large-scale Renewable Energy Target (LRET)

Record additions of 7.5 GW renewable capacity in 2024—of which 4.3 GW came from large solar—confirm solar PV as the lowest-cost power source at USD 36 per MWh. Commitments totaling 1.918 GW last year point to a robust pipeline, with Queensland, New South Wales and Victoria dominating development. Midday solar peaks now require advanced dispatch strategies and more flexible resources. Falling module prices and streamlined permitting processes are drawing new investors, while grid operators refine curtailment rules to safeguard network stability. In this context, solar’s share of national generation continues to rise quickly, fostering new technical and commercial norms.^{[2]Clean Energy Regulator, “Large-Scale Renewable Energy Target Statistics 2025,” cleanenergyregulator.gov.au}

Surge in Corporate PPAs from Mining & Data-Center Operators in Western Australia

Large miners and digital-infrastructure firms are contracting multi-megawatt solar and storage projects to decarbonize operations under Western Australia’s Energy Transformation Strategy. These PPAs often anchor financing for remote projects that may otherwise struggle for scale. Within the South West Interconnected System, more than one quarter of households already export rooftop solar, complicating balancing tasks yet creating learning curves for corporate offtakers. As commercial load centers align with renewable build-out, new revenue models—involving shared network upgrades and on-site batteries—are emerging. The trend broadens the buyer base for clean energy and diversifies regional demand.

Grid-scale Battery & Pumped-Hydro Investments Accelerated by Capacity Investment Scheme (CIS)

The CIS targets 9 GW of clean dispatchable capacity by 2030 alongside 23 GW of variable renewables. Revenue underwriting has unlocked AUD 2.4 billion for storage just in Q1 2025, covering six projects that add 1.5 GW. Examples include AGL’s 500 MW Liddell battery due online in 2026 and Alinta’s 900 MW Oven Mountain pumped-hydro scheme. By sharing upside with consumers and de-risking downside for developers, the CIS draws in new lenders and lowers the cost of capital, especially for long-duration assets. Batteries are already providing frequency control, while pumped hydro positions for seasonal firming as coal exits.

Federal “Rewiring the Nation” Funding for Super-Grid Transmission to Renewable Energy Zones

The AUD 20 billion program backs 10,000 km of new lines by 2050, clearing pathways from remote REZs to load centers. Priority routes cover HumeLink in New South Wales, VNI West between Victoria and NSW, and Marinus Link to Tasmania. Beyond steel in the ground, the program aligns planning rules and community-engagement standards, acknowledging that social license makes or breaks schedules. Early identification of renewable “highways” helps developers cluster projects, pool connection costs and reduce curtailment. As coal closures accelerate, robust transmission becomes pivotal to maintaining reliability and enabling cross-state arbitrage.

Transmission Bottlenecks Causing Curtailment in Queensland & NSW REZs

Grid constraints raise curtailment for solar and wind, cutting residential rooftop exports by 1.5% on average and eroding utility-scale revenues even further. Mispricing in the National Electricity Market is estimated at 2.2% of generator income, reflecting congestion that planners struggle to solve at the current build-out pace. Queensland’s three REZs aim to support over 3.3 GW of renewables, yet network upgrades lag behind developer pipelines. Project delays reduce investor confidence and prolong reliance on fossil assets. Addressing these pinch points is critical for unlocking latent generation and meeting policy targets.

Community Opposition Delaying Wind Farms & HV Interconnector Routes

Surveys indicate 70% of Australians want renewables built without harming local interests. Regional pushback centers on land use, visual impact, and decommissioning costs, with some wind farms taking a decade to navigate approvals. Transmission lines face similar scrutiny; only 35% of polled residents favor extensive new corridors. Developers increasingly embed early outreach, community benefit fund,s and transparent end-of-life plans to secure acceptance. Regulators are writing new rules to formalize engagement, but in the interim, schedule overruns inflate project costs by up to 55% and slow capacity additions.

Segment Analysis

By Power Generation Source: Coal Dominance Waning Amid Solar Surge

Coal delivered 45-50% of output in 2024, yet its share of the Australia power market is falling as retirements mount. Natural gas supplied 17%, offering fast-ramping support, while hydropower’s 7% share continued to stabilize peaks. Solar PV added 3 GW of rooftop capacity in 2024, lifting cumulative installations beyond 25 GW and pushing solar’s contribution to 18% of generation. Wind supplied 13.4% last year and is advancing through CIS-backed projects. Battery storage under construction provides a parallel growth story, enhancing grid resilience as variable renewables scale.

Solar PV is forecast to grow at a 7.5-8.5% CAGR to 2030, the fastest among all sources. This trajectory will lift solar’s portion of the Australia power market size to new highs, even as coal plants close. Meanwhile, pumped hydro and hydrogen-ready gas will firm intermittent output. These shifts demand real-time market reforms and flexible ancillary services to maintain stability, underscoring the interdependence of generation and network investment.

Note: Segment share of all individual segment available on report purchase

By End User: Utilities Maintain Dominance While Residential Growth Accelerates

Utilities held 55-60% of electricity consumption in 2024, reflecting centralized supply structures and the influence of three large vertically integrated gentailers. Industrial customers, responsible for 44% of end-use energy, remain sensitive to gas prices and are exploring electrification where technically feasible. Emerging corporate PPAs and on-site renewables allow industrials to hedge costs and decarbonize simultaneously.

Residential demand is the fastest-growing slice of the Australia power market, expanding at an 8.2-9.5% CAGR through 2030. More than 4 million households now generate rooftop power, turning consumers into active market participants. Home battery sales, supported by state rebate programs, are rising in tandem with electric-vehicle adoption. These distributed assets are shifting load curves and will account for a larger share of the Australia power market size by 2030, prompting retailers to offer dynamic pricing and virtual-power-plant schemes.

Note: Segment share of all individual segment available on report purchase

Geography Analysis

Geography Analysis

New South Wales accounted for major share of capacity in 2024 and is accelerating its transition by allocating 3.7 GW—over half of the first CIS tender—to local projects. Five REZs aim to channel investment into high-resource zones and relieve coal-reliant grids. Transmission delays, however, constrain output and elevate curtailment, pressing planners to streamline approvals and community engagement.

Western Australia, operating an independent market, is the fastest-growing region with a 6.9% CAGR projected from 2025 to 2030. The state funds large storage, wind and grid upgrades under its Energy Transformation Strategy, and CIS tenders in the Wholesale Electricity Market will run annually through 2027. Over 35% of homes already have rooftop arrays, creating both a laboratory and a stress test for high distributed-generation systems. ^{[3]Government of Western Australia, “Energy Transformation Strategy Update,” wa.gov.au}

Victoria ranks third in new-build momentum, securing 1.6 GW of CIS capacity and pursuing offshore wind such as the 1 GW-plus Spinifex proposal. Queensland leads in financially committed renewable megawatts, supported by three designated REZs. South Australia continues to demonstrate extreme renewable penetration, using synchronous condensers and batteries to ride through volatility. Tasmania leverages abundant hydropower and seeks export potential via the planned Marinus Link. The Northern Territory focuses on remote microgrids, illustrating the diverse requirements across the Australia power market.