Seizing opportunities in the energy transition

Australia's energy transition

Preparing for a sustainable and prosperous energy future

Transitioning Australia's electricity generation system from fossil fuels to renewables, in tandem with reducing emissions across all sectors of the economy, presents both a formidable challenge and a real opportunity. Australia's future will be shaped by this transition—and there's a lot corporations can do to ensure a sustainable and prosperous energy future.

Five particular challenges of the energy transition


Balancing shareholder returns and decarbonisation

Corporate leaders are striving to balance financial returns for shareholders with the business imperative to reduce carbon emissions. This delicate dance is particularly evident in the case of corporates with large energy demands, which seek to include 'green energy' and other emissions reductions strategies in their operations while considering cost-effectiveness and minimising business disruption. It is often cheaper and easier to maintain the status quo, but that's becoming less of an option.


Clarifying the role of government

Government is central to ensuring the energy transition proceeds quickly and in an orderly fashion, given its involvement with the energy sector at so many levels. Areas that need clarity are:

  • the role government will play in the transition and how it will work with the private sector
  • how the various levels of government across Australia will coordinate
  • the policies and regulatory settings that will apply—there is currently so much out there for consultation, it is almost overwhelming
  • how the very significant social licence issues relating to the energy transition will be dealt with.


Ensuring the private sector can play its role

There's a clear political commitment to enabling the energy transition, yet so much still needs to be clarified for the private sector, especially given the urgency of the shift. While it's always been the case that the private sector has a pivotal role to play in driving the move to renewables and reducing emissions, the next few years will see regulatory changes coming thick and fast.


Addressing the funding dilemma

Funding the energy transition means striking a balance between the role of government and private capital. While government plays a vital role, it cannot single-handedly finance the transition. There are significant funds in the hands of superannuation and private capital, and a clear desire to direct them towards the transition, but this will only happen if the return on investment is acceptable and regulatory and policy settings are clear and stable.


Using technology to accelerate the transition

Innovation and technology will play a crucial part in the energy transition. Digitalisation and electrification allow for increased energy efficiencies of products, processes and people. However, unlocking technology's potential needs funding. Typically, climate tech, compared with other scalable tech, has a longer time horizon before it becomes a viable private capital investment. There are longer lead times to market and longer times until positive returns are achieved. To accelerate tech development, deployment and commercialisation, collaboration between corporates, tech developers, energy providers, researchers and government is vital.

What's in this guide

In this guide, we explain the key elements of the energy transition to help our clients understand and play their role in addressing the challenges it raises. We will keep you abreast of the latest legal and regulatory developments in this fast-moving space, and explore what they mean for corporates, investors and developers. We've also prepared a snapshot of the five key regulatory reforms that are currently in progress or that have recently been implemented, and that are designed to facilitate the energy transition.

The guide will be updated quarterly and will cover: