Energy supply
Australia’s energy system is undergoing its greatest transformation since the 1950s. These changes are driven by economic, engineering and environmental factors. Consumer preferences are also changing, with an increasing desire for independence and control over electricity supply and use.
Wind and solar photovoltaics (PV) are now the cheapest forms of new electricity generation in terms of electricity produced. To meet our net zero targets, we will need to accelerate and effectively double the level of renewable generation each decade from now to 2050.
The Australian Government is committed to delivering our future energy system through Powering Australia — the government’s plan to create jobs, put downwards pressure on electricity prices and contribute towards reducing Australia’s emissions to 43% of 2005 levels by 2030.
The government’s Rewiring the Nation will invest up to $20 billion in low cost finance to rebuild and modernise the grid. This will be a key enabler to the integration of more renewables into the National Electricity Market (NEM).
See more about what the government is doing in a number of areas including:
- Clean energy and the electricity market
- Delivering priority transmission projects
- Energy data
- Energy programs
- Growing Australia's hydrogen strategy
- Offshore renewable energy
- Pumped hydro
- Renewable Energy Target
Where our energy comes from
Most of Australia’s energy relies on traditional sources — non-renewable fossil fuels. Coal and gas accounted for around 70% of electricity generation in 2021.
Over the last decade, the share of electricity generated by renewable energy in Australia has increased significantly, rising from around 10.5% in 2010 to 29% in 2021.
Non-renewable sources
Most of our electricity is produced from burning black and brown coal at large power stations.
Natural gas is the third highest energy source in Australia (after oil and coal). It is used by power stations for electricity generation, factories for manufacturing, and homes for heating and cooking. It is a non-renewable source that emits around half the emissions of coal when used to generate electricity.
Gas used to come from large remote reservoirs, such as the Moomba and Bass Strait gas fields. More recently, coal seam gas comes from Queensland with untapped reserves in NSW and Victoria.
Renewable sources
Renewable energy from sources like wind, solar and hydro provided about 29% of Australia’s electricity generation in 2021. This includes both large generators and small solar PV systems owned by Australian families and businesses.
As of 30 June 2022, there are over 3.1 million solar power PV systems and more than 4.6 million small-scale renewable installations in Australia.
There are also:
- 1.44 million solar and heat pump water heaters
- 424 wind systems
- 20 hydro systems.
(Source: Clean Energy Regulator)
For large-scale renewables, as at May 2022, 29.2 GW of large-scale renewable energy capacity had been accredited under the Australian Government’s Large-scale Renewable Energy Target (LRET) scheme.
Today, Australian businesses and householders have more options than ever to supply and manage energy.
You might have an electric vehicle powered by the solar PV on your roof or an in-home display linked to a smart meter that tells you when to reduce power consumption in response to prices that change during the day. Battery storage technology to store solar power for use at night is rapidly increasing in popularity.
How energy gets to your home or business
Electricity
The National Electricity Market (NEM) interconnects the 5 eastern and southern states and the ACT. It delivers around 80% of all electricity in Australia. Western Australia and the Northern Territory are not connected to the NEM but have their own electricity systems and regulatory arrangements.
Large generators (power plants) produce the electricity from an energy source such as coal, wind, solar or hydro. High voltage transmission lines carry the electricity over long distances.
Distribution networks convert the high voltage back to low voltage currents for distribution via the local poles and wires to homes, offices and factories. Many homes have solar PV panels and some of these have their own battery storage systems.
Gas
Gas is sourced from gas fields (oil and gas wells or coal seam wells) and processed to specification, including adding the ‘rotten egg’ odour for safety reasons, and compressing the gas for transport.
Some of the gas is used at this stage for gas powered generation (GPG), or stored in large facilities for later use. The rest is sent long distances through large transmission pipes to what is known as a 'city gate'. When the gas runs through the city gate, the pressure is reduced making it suitable for distribution through a smaller network of pipes to homes, offices and small industrial customers.
Read more
Australian Energy Market Operator (AEMO)
Australian Energy Market Commission (AEMC)
