Australia's Energy Transition: A Regulatory and Policy Stocktake

by Tina Soliman-Hunter and Madeline Taylor

Abstract

(14/10/2025) Australia's energy transition has reached a pivotal juncture. Renewable energy penetration has reached over 40% in the National Electricity Market, and all coal-fired power stations will be retired by 2038 as Australia vies for the COP31 Presidency. Achieving a successful Australian energy transition requires regulation that reshapes existing investment structures and delivers policy coherence underpinning the twin goals of decarbonisation and economic resilience. The curtailment of large-scale renewables generation reaching 10.9 GW in September 2025 brings this conundrum into sharp relief, raising questions of how Australia manages a rapid transition while integrating diverse decarbonisation pathways. With just five years remaining to achieve the legislated target of 82% renewable energy by 2030, regulatory frameworks, policy settings, and climate goals have increasingly focused on three imperatives: diversifying the decarbonised energy mix, ensuring robust market design, and maintaining social licence.

This article examines the evolution of Australian energy transition policy and regulation over the past fifteen years, charting the legal, social, and economic challenges and opportunities across the electricity, hydrocarbon, and emerging decarbonised technology sectors. It surveys the policy trajectories leading to current reforms, including the introduction of Australia's first capacity market, the financing of renewable hydrogen projects, the formulation of the National Gas Plan, the declaration of offshore wind zones, the role of petroleum, gas, and carbon capture and storage and nuclear energy. The Australian energy transition offers a valuable case study in regulatory and policy adaptation, providing lessons for future governance for existing and emerging energy technologies and systems.

Australia's Energy Transition: A Regulatory and Policy Stocktake is part of the OGEL 3 (2025) Special Issue on "Blue Sky Issues in the Energy Transition" and is available here www.ogel.org/article.asp?key=4184.