Labor faces huge miss on 2030 renewable energy target

A bold 2030 green target by the Albanese government will fall well short, according to a top energy forecaster.

Energy Minister Chris Bowen attends the first cabinet meeting at Parliament House in Canberra. Picture: NewsWire / Martin Ollman

Labor will undershoot its 2030 renewable energy target by 14 percentage points due to delays in delivering big solar and wind projects, prompting global consultancy Wood Mackenzie to warn the shortfall may imperil the ­Albanese government’s pledge to slash emissions this decade.

Climate Change and Energy Minister Chris Bowen this week committed to turbocharging Labor’s clean-energy revolution to achieve the government’s ­ambitious goal of 82 per cent of ­renewables in the electricity grid by 2030.

One of the industry’s top forecasters said Australia would fall substantially short of the goal with its modelling showing green energy only reaching 68 per cent by the end of this decade.

Renewables and hydro account for 58 per cent under its estimates with battery storage adding a 10 per cent share.

Delays delivering a transition to clean energy may also trigger coal-fired power stations to ­remain in the power grid for a further five to seven years, according to Wood Mackenzie. “There are a lot of variables that are uncontrollable in some respects and it just makes it very unlikely that we would achieve 82 per cent generation,” said Wood Mackenzie senior analyst Natalie Thompson.

Renewables’ share of generation in the national electricity market was about 40 per cent in 2024 and is likely to grow to between 44 and 46 per cent this year, according to the Clean Energy Regulator.

Despite a bulging pipeline of renewable projects proposed by developers, Wood Mackenzie pointed to delays in permissions, funding sign-off, construction, commissioning and connection to the power grid for a lag in delivering new supplies into the system.

Still, the Albanese government said it was on track to hit the milestone this decade.

“Investment figures have consistently shown we are on track to get to 82 per cent renewables by 2030,” a spokeswoman for Mr Bowen said. “This of course includes renewable energy stored in batteries and despatched from batteries. We remain on track.”

The risk of Australia failing to hit the green goal may also put into doubt the nation’s ability to reach an emissions reduction target of 43 per cent on 2005 levels by 2030, according to Wood Mackenzie. “What it does mean is that 43 per cent target it at risk because electricity generation is quite a significant component of that broader emission reduction target,” Ms Thompson said.

The Australian understands the Climate Change Authority is weeks from finalising its advice on an upgraded 2035 emissions-­reduction target, which will be more aggressive than Labor’s current 2030 pledge to slash emissions by 43 per cent.

In the wake of the Coalition’s heavy election defeat, new Liberal leader Sussan Ley and Nationals leader David Littleproud this week revealed they would review the parties’ policy supporting net-zero emissions by 2050.

Scores of developers are rolling out large-scale renewable projects, but experts say delivering such a huge slab of new generation into the market in under five years is not achievable.

Longer storage projects, which can support the grid during periods beyond four hours, continue to lag and generation assets such as large-scale wind and solar projects are also struggling to overcome a plethora of issues.

The Clean Energy Council, however, points to huge momentum in the market. More than $9bn worth of renewable energy projects secured ­financial commitments in 2024 – the highest in six years – the council’s data has shown, buoying hopes Australia could see a much-anticipated rapid increase in zero-emissions capacity.

The CEC data indicates some progress as the federal Labor government’s centrepiece strategy, the capacity investment scheme, begins to accelerate work.

Labor in 2023 said taxpayers would underwrite 32 gigawatts of capacity. The Australian Energy Market Operator estimates the nation needs 57GW of grid-scale solar and wind generation capacity to be installed by 2030 – a rise from the current capacity of 19GW.

Labor points to the Capacity Investment Scheme being consistently oversubscribed, which gives it confidence it can deliver a transition to green energy from the coal base that historically has dominated the grid.

Wood Mackenzie said coal power plants might be needed for up to seven more years depending on the rollout of renewables, storage and the role of gas in the broader switch away from fossil fuels. “I think in an ideal world, the government wouldn’t see extensions to some of these going beyond their life in terms of what they were initially installed for. But pushing it out five to seven years is reasonable,” Mr Thompson said.

Rystad Energy in March predicted 65 per cent renewables by 2030, saying the 17 per cent shortfall would be compounded by ­infrastructure bottlenecks and longer supply wait times which would hamper the rollout of renewables and energy storage, significantly affecting energy security for Australians.

Under the capacity investment scheme, developers are guaranteed a minimum return on new solar and wind projects. Should the wholesale electricity price fall below an agreed threshold, taxpayers will compensate the renewable energy project.

Should the wholesale electricity price exceed a metric, ­developers pay the government – a design that removes revenue risk from developers and accelerates much-needed investment.

The CEC said there were 88 renewable electricity generation projects that had ­reached financial commitment or were under construction, representing 13.2GW of capacity.

Originally published as Labor faces huge miss on 2030 renewable energy target