Investment in renewable projects collapsed by 50 per cent over the past year, wiping out $4 billion in spending on the rollout, compromising the Albanese government’s clean energy targets and spurring industry warnings that the delays could raise electricity bills.
Financial commitments for new renewable generation projects fell to a 10-year low in 2025 of $4.4 billion, half the value of projects that reached financial close in 2024, according to the Clean Energy Council’s annual report, published on Tuesday.
Australia’s clean power shift was approaching a “critical juncture”, said Jackie Trad, chief executive of the Clean Energy Council, representing renewable energy builders and investors. Unless the decline was reversed, it threatened to “stall momentum” in the shift to cleaner sources that will be critical to meet soaring electricity demand and avoid price shocks and blackouts as ageing fossil fuel generators retire, she said.
“Renewables are supplying nearly half our electricity, we are now a top-three global player in big battery storage, and households are taking control of their own power bills in record numbers,” said Trad, a former Queensland deputy premier and treasurer.
“But we need to be honest about where we are, and where we need to be.”
The Clean Energy Council said the proportion of renewables had already risen to about half of the electricity in the grid, but that state and federal governments needed to make urgent changes to boost investor confidence.
Key clean energy projects have suffered years of planning delays, rising building costs and opposition from regional communities worried about impacts on farming practices, property values and the environment.
Crucially, hundreds of kilometres of new transmission lines needed to link far-flung renewable energy zones to major cities face years of delays.
The report said that a one-year delay to a major transmission project could raise household
electricity prices by up to 20 per cent.
Such investment barriers were “holding back billions of dollars in private capital” waiting to invest in new solar and wind farms, Trad said.
“These barriers are not unsolvable, and need to be tackled simultaneously and at speed,” she said.
Opposition energy spokesman Dan Tehan said the report showed that Energy Minister Chris Bowen was failing.
“His renewable energy targets are collapsing before his eyes and no matter how much taxpayer money he throws at problems, he cannot fix them. He needs to come clean with the Australian people,” Tehan said.
Bowen said the government’s scheme to underwrite private renewables projects, the Capacity Investment Scheme, was working and that the renewable energy transition was gaining pace.
“The seventh Capacity Investment Scheme tender will support nine new renewable energy projects supplying enough cleaner, cheaper and more reliable electricity for 4 million Australian households by 2030. This was the largest result for our national energy grid, ever.”
The investment slowdown further raises the risk that the Albanese government will fail to hit its ambitious target for renewable energy to make up 82 per cent of the grid by 2030.
Global energy consultant Rystad has forecast that the grid will reach only 60 per cent renewables by 2030, and independent think tank the Grattan Institute has also said the 82 per cent target is likely unachievable.
“The gap between what is being built and what is required is widening. Even when combined with rooftop solar growth, current investment levels fall well short of the pace needed to meet future energy demand and system requirements,” Trad’s report said.
The sharpest decline in clean energy was for spending on onshore wind farms, which fell 57 per cent year-on-year to $2.6 billion, while solar farm spending declined 5 per cent to $1.9 billion. Wind power is now the most urgent need for the grid, as it complements the build-up of rooftop and large-scale solar projects.
However, Australia’s shift to clean energy is among the world’s most advanced. Renewables broke on the eastern seaboard exceeded past 50 per cent of the electricity mix in the final three months of 2025.
While coal still accounts for the bulk of Australia’s electricity across an entire year, more than half of the remaining coal-powered generators on the eastern seaboard are scheduled to close down within the next decade, as the ageing and emissions-intensive equipment become less reliable and competitive against cheaper renewables.
Energy companies and governments say the cheapest path forward for the nation is to replace ageing coal generators with backed-up renewables, and have spent years pouring billions of dollars into wind and solar farms, energy-storage and transmission infrastructure, and the rollout of household solar panels and batteries.
The growth of grid-scale batteries, which stash cheap solar energy during the day to discharge it after sunset, has been particularly notable, outstripping even the most ambitious forecasts and contributing to steep falls in the wholesale cost of electricity, according to the energy market operator.
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Nick Toscano is a business reporter for The Age and Sydney Morning Herald.Connect via X or email.
