Australia set to fall short of 2030 renewable target, Wood Mackenzie warns

Leading international energy research firm Wood Mackenzie is forecasting Australia to fall well short of its renewable energy targets.

“Despite the federal government’s ambitious targets, our analysis indicates that Australia is currently on track to achieve only 58% renewable electricity generation by 2030,” senior analyst of energy storage and solar Natalie Thompson said.

“This highlights the urgent need for increased investment and greater co-ordination across all levels of government to accelerate the energy transition.”

Renewable energy targets

Wood Mackenzie noted that Australia’s re-elected Labor government had reaffirmed its commitment to accelerating the energy transition, pledging to uphold its controversial renewable energy targets.

Labor has reinforced its target of 82% renewable electricity generation by 2030 and an economy-wide strategy to reduce emissions by 43% during the same period.

The Capacity Investment Scheme (CIS), introduced in 2022, targets 32 gigawatts of additional capacity by 2030, building on the 8.4GW of utility-scale solar, wind and storage capacity added to the grid between 2021 and 2024.

Increased capacity

Wood Mackenzie expects Australia’s utility-scale storage capacity to increase from the current 2.5GW to more than 16GW by 2030.

This sixfold increase is bolstered by the CIS, which has already awarded more than 8GW in funding including 2.8GW for storage solutions with an average duration of 3.5 hours.

“While over 65GW of utility-scale storage projects are in various stages of development, only 5–10% of announced projects are likely to reach financial close,” Ms Thompson said.

“Continued policy support is crucial to overcome grid connection and project planning barriers.”

Accelerated EV adoption

Wood Mackenzie noted that the Labor government would also maintain its support for the adoption of EVs through a variety of funding initiatives and policies.

“EVs currently represent about 10% of passenger vehicle sales in Australia, with over 350,000 on the road,” Ms Thompson said.

“Our projections show that by 2030, EVs will account for 3.7 terawatt-hours of demand, or 1% of gross electricity consumption.”