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Renewable electricity

Kelvin Say (2023) - "Renewable electricity - Australia". Published online at Retrieved from: '' [Online Resource]

The growth of renewable electricity in Australia has been historically driven by the Renewable Energy Target. This required 33 TWh (or approximately 23.5%) of electricity generation in 2020 to come from renewable energy sources and remaining constant thereafter until 2030. To meet this target, large-scale generation certificates (LGCs) and small-scale technology certificates (STCs) are issued to renewable energy generators. Wholesale purchasers of electricity (mainly electricity retailers) are required to purchase a sufficient number of these certificates to meet their renewable energy obligations. These LGCs and STCs can also be purchased by individuals or organisations on a secondary market to offset their energy emissions.

With the post 2020 plateau of the national Renewable Energy Target, state governments have introduced additional renewable energy and storage targets to continue increasing the share of renewable energy generation in the energy mix.

In August 2022, the Energy Ministers of Australia agreed to introduce an emissions reduction objective into the National Energy Objectives (NEO). This will integrate emissions reduction and energy policy into the national energy laws and Australia's energy market governance bodies.

Shares in the power sector

Generation by renewable energy technologies currently contribute ~35% towards Australia's electricity demand. The 2022 Integrated System Plan (ISP) by the Australian Energy Market Operator (AEMO) uses a least-cost (and emission constrained) model to evaluate transition scenarios of the electricity system until 2050. The Step Change scenario involves a rapid initial transition to renewable energy that reaches 83% by 2030. It is also regarded as the most likely future scenario. Federal government modelling to meet its interim 43% emissions reduction target by 2030 finds a similar outcome with the share of renewable energy in the power sector reaching 82% by 2030.

Installed Solar PV capacity

Solar PV is an major source of renewable energy generation in Australia with over 22 GW of solar PV capacity installed as of 2021.

Notably, a signficant proportion of installed solar PV capacity has come from small-scale generators, namely rooftop PV systems. As of 2022, over 3 million or 32% of households have installed a rooftop PV system.

The Step Change scenario in the 2022 Integrated System Plan (ISP) provides estimates of future solar PV capacity across three categories (utility, medium- and small-scale). Utility PV systems have a rated capacity above 5 MW. Small-scale PV systems have a rated capacity under 100 kW (typically rooftop PV on residential households). Medium-scale PV systems have a capacity between 100 kW and 5 MW. Both small- and medium-scale PV systems are considered as distributed PV as they are predominantly situated behind-the-meter on end-user premises.

At the end of 2021, 5.2 GW of utility PV capacity is in operation. The Step Change scenario considers utility PV capacity to remain generally below that of rooftop PV capacity, however expectations remain for significant growth after 2035 which allow it to reach approximately 70 GW by 2050.

Utility PV

At the end of 2021, 17.2 GW of distributed PV capacity is in operation. As distributed energy resources (DER) their significant contribution and continued growth trajectory is driving governing institutions (i.e. AEMO and Energy Security Board) to explore a transition towards a decentralised and two-way energy system. This would allow distributed PV and other behind-the-meter energy assets to improve their aggregate operational and market participation. The Step Change scenario estimates a generally linear growth trajectory to approximately 68 GW by 2050.

Distributed PV

Installed wind energy capacity

While solar PV (combined) is the largest source of renewable energy in the power sector, wind turbines still generate more energy at the utility-scale. Australia has significant wind resources, which has led to over 9.1 GW of installed capacity as of 2021. The Step Change scenario expects significant growth in onshore wind capacity, which is more than twice of current growth rates.