Welcome to our special post-LNP split newsletter edition. See previous issues here.

21 MAY 2025

SPECIAL EDITION:

LNP SELF-IMMOLATES AS VOTERS BACK RENEWABLE FUTURE

At the recent federal election, Australians sent a clear and emphatic message: they want urgent action on energy transition and climate change. The electorate rejected the LNP’s nuclear con job, energy transition delay tactics and climate denialism. Labor was returned with a decisive mandate to accelerate Australia’s renewable energy rollout and economy-wide decarbonisation.

The nuclear fallout now includes a historic rupture between the Coalition partners, with the Liberal and National Parties committing the most spectacular act of political self-annihilation in living memory. Energy and climate policy were key, with the partners unable to reach agreement on a credible way forward and the Nationals reaffirming their commitment to nuclear – the very policy binned by voters. Since neither party can form government without the other, they have, as of now, consigned themselves to electoral oblivion. 

Importantly, the Coalition split also provides the opportunity for a broader political realignment. The Nationals, by doubling down on nuclear and fossil fuels, are irretrievably out of step and irrelevant. After their recent drubbing, the Liberals are in the electoral wilderness. Meanwhile, climate-focused Community Independents and other climate and energy progressives gained traction, especially among voters disillusioned with the LNP’s record of abject failure on climate and energy.  The Liberals now have the opportunity to free themselves of their National Party shackles and pivot to alignment with what Australians need, rather than what fossil fuel vested interests demand they advocate. Meanwhile, the expanded Teals bench will bring sensible advocacy and informed debate, holding the Albanese government to account and ensuring the absence of effective opposition does not lead to complacency and inertia.

This is a turning point in Australia’s energy and climate politics. During its near-decade in power to 2022, the Coalition systematically derailed the clean energy transition. Totally captured by fossil fuel interests, it dismantled effective climate policies, undermined renewables investment, and fostered disinformation about emissions and the reliability of firmed clean energy. It failed to act on our time-critical opportunity to reposition from a top 3 global petrostate to zero-emissions energy trade and investment leader in a rapidly decarbonising globe, putting our future economic and energy security at grave risk. 

The consequences of this profoundly damaging legacy are still being felt. Since returning to office, the Labor government has been playing catch-up as it seeks to massively scale our energy transformation to achieve its 82% renewables target by 2030, and implements its Future Made in Australia program, designed to remake the nation as a green industrial powerhouse, informed by the Net Zero Economic Authority and Climate Change Authority. It has been building public-private collaborations via the National Reconstruction Fund, alongside the Clean Energy Finance Corporation, Australian Renewable Energy Authority, Northern Australia Infrastructure Find and Export Finance Australia, as well as fostering greater state government alignment in transition.

The Coalition’s divorce removes a major obstacle to progress. The pathway is clear for Labor to advance its clean energy agenda and build further momentum around urgent, scalable solutions: rapid rollout of transmission, electrifying everything, accelerating deployment of firmed renewables, both distributed – as in its $2.3bn Cheaper Home Batteries program – and utility, via mechanisms such as its enhanced Capacity Investment Scheme, creating regional jobs in clean industries, and deploying clean affordable energy to underpin downstream industries and consumers. Critically, it can now go full steam ahead on decarbonising our key exports, such as iron ore in which we lead globally, pivoting to onshore value-adding of green iron, a $100bn annual economic uplift opportunity. 

Business and investors now have a level of policy certainty unimaginable a few short years ago, meaning private finance, domestic and international, can confidently crowd-in behind state support for green transition.

Australia should now be strengthening collaboration on international climate, trade and carbon policy with our key trading partners. Our economic and political influence as a middle power within the economically-advanced Asia-Pacific lies in our status as the trading partner of choice for much of the region’s industrial base, only strengthened by our abundance of critical minerals, strategic metals and other resources key to transition. As the Albanese Labor government gears up to bid to host COP31 in late 2026, it must grasp its responsibility to demonstrate leadership in actions, not just words, on slashing domestic emissions – including by increasing the ambition of its emissions reduction target to 75% by 2035 – and use the comparative advantages it can leverage in a decarbonised global economy. 

We are brilliantly placed to champion momentum towards global action on methane and a carbon price in regional trade throughout the Asia-Pacific via an Asian carbon border adjustment mechanism (CBAM), building Asian collaboration and alignment with Europe and its carbon tariff. This would reflect the social cost of the carbon emissions embedded in industrial commodities. It would provide the price signal to mobilise global capital at speed and scale into decarbonising industry, accelerating efforts to cut carbon, and effectively valuing those commodities embodying renewable energy in their production.

Labor’s extraordinary electoral victory is now coupled with the incomparable political gift of the implosion of the Opposition and a climate and energy-forward crossbench. This hands it a once-in-a-hundred year opportunity to secure a historical legacy as the government that positioned Australia for the next century and more as a clean, green superpower in the emerging net-zero world economy, leveraging our abundant renewables potential and world-leading resources to build prosperity and a safe climate for all. 

>>> See our post-election newsletter on what we need to see now from the Albanese government.

IN OTHER NEWS:

HUGE BOOST TO NSW LARGE-SCALE FIRMED RENEWABLES

NSW Energy Minister Penny Sharpe announced this month that ten renewable energy and battery energy storage system (BESS) project proposals with a total generation capacity of 7.15GW have been given the green light to connect to the Central-West Orana Renewable Energy Zone (REZ).

The NSW Government has awarded groundbreaking ‘access rights’ to renewable energy companies, which pave the way for wind and solar farms and large-scale batteries to connect to the incoming transmission line in the REZ. They are due to be operationalised hopefully well before 2031, generating a much needed 15,000GWh annually.

This brings to 10GW the amount of new capacity NSW has pushed forward in the last month, after 3GW of new projects were granted access rights in the South West Orana zone in late April, providing much needed replacement and new capacity to hopefully permanently lower prices in the long term.

Renewable energy developments surrounding Dubbo in western NSW will add three times the capacity (less so generation) of the state’s soon to be retired largest coal-fired power clunker, Eraring.

The announcement comes after the Australian Energy Market Operator (AEMO) market operator confirmed that total renewable generation in Australia’s eastern states had reached 43% in 1QCY2025 – up from 39% in the first quarter of 2024, supported by record high rooftop solar generation. 

The projects are:

Valley of the Winds – ACEN Australia (919MW)

Birriwa Solar (solar facility) – ACEN Australia (600MW)

Birriwa BESS – ACEN Australia (600MW)

Sandy Creek Solar – Lightsource bp (700MW)

Sandy Creek BESS – Lightsource bp (700MW)

Cobbora Solar – Pacific Partnerships (700MW)

Cobbora BESS – Pacific Partnerships (400MW)

Tallawang Solar Hybrid – Potentia Energy (500MW)

Spicers Creek Wind Farm – Squadron Energy (700MW)

Liverpool Range Wind Farm (stages 1 and 2) – Tilt Renewables (1,332MW)

Well done to NSW EnergyCo, it has been a long journey implementing the Electricity Infrastructure Roadmap since ex-Minister Matt Kean championed this massive new development, it is great to have bipartisan support for climate and energy security in NSW, and now also federal state-alignment.

This medium term solution will work exceptionally well complementing the accelerated rooftop solar and distributed behind the meter battery storage incentive program the PM Anthony Albanese Federal Government's election commitment for a 30% battery subsidy program nationally, stackable on top of the NSW Government subsidy program of up to $2,400/battery. Distributed energy resources can be deployed super-quickly at scale, and leverage and enhance the reliability of the existing grid transmission and distribution infrastructure we have already funded.

Meanwhile in QLD…

We commented recently in an op ed for Renew Economy on the LNP Crisafulli government’s devastating policy reversal on the state’s accelerating energy transition, previously well underway thanks to the former ALP government’s landmark $62bn Energy and Jobs plan.

There was some promising news this week that several major wind projects paused by the LNP have now been given the green light – Andrew Forrest operated Windlab’s giant Wongalee and Bungaban wind farms have received state development approval, each supplying 1.4GW of energy. Great that the compelling economics and private investment are winning out over ideology and fossil fuel vested interests.

Let’s hope this prefigures a credible and pragmatic approach from the QLD government to accelerating the state’s energy transition in the interests of the state’s households and industry.

CHINA’S ELECTRICITY REVOLUTION A BULWARK AGAINST TRUMP TRADE WAR 

A major story in the UK’s Financial Times featuring CEF’s work importantly frames China’s growing leadership in the global race to electrification and decarbonisation as a testament to its leadership’s advancement of energy security as integral to the Chinese Government’s holistic concept of national security, which was recently articulated (and published for the first time) in the Chinese Government’s White Paper on National Security in the New Era. 

Energy security is the new zeitgeist as many countries around the world scramble to protect their strategic autonomy amid global uncertainty and supply chain disruption, since Russia’s invasion of Ukraine and accelerated by Trump’s trade war. This rationale has been part of the Chinese Government’s prioritisation of rapid ongoing whole-of-economy electrification, driven by clean technologies, which offers the country a “strategic buffer from trade decoupling and rising geopolitical tensions with the US”. Indeed, as we saw on 12 May, the Trump Administration’s flip-flopping on its worst tariffs against China is a clear vindication of the Chinese Government’s foresight and judgment. 

As Ember's energy strategist Kingsmill Bond says, for many countries weighing up the costs of Trump’s trade war, the choice between US LNG and Chinese clean power technologies could be a defining one both financially and for decarbonisation: “Building on Chinese electrification technologies is going to be cheaper than trying to sustain the old fossil fuel system. Solar beats LNG on cost and that is a boon for the climate. Basically $1 spent on importing solar panels would save $1 annually in gas imports while generating the same amount of electricity.”

Clean energy sectors accounted for a record 10% of China’s GDP and drove a quarter of its growth last year, according to analysis of official government statistics by the Centre for Research on Energy and Clean Air (CREA). The International Energy Agency (IEA) notes that combustion uses of petroleum fuel in China have plateaued with “very limited” potential for future growth, a trend driven largely by the adoption of EVs in the transport sector and China’s gradual shift from manufacturing to more services-based growth. A recent Carbon Brief analysis has also shown that in the first quarter of 2025, growth in China’s clean power generation has caused the nation’s carbon emissions to fall for the first time, despite rapid power demand growth.

The FT feature quotes CEF’s tabulation of outbound foreign direct investment (OFDI) by Chinese multinationals since the start of 2023 at US$156bn across more than 200 transactions involving new renewable energy infrastructure financing, the construction of new offshore cleantech manufacturing facilities and collaboration with leading foreign companies and governments. The majority of this OFDI has been emerging markets in the Global South, consistent with the Chinese Government’s policy of greening the BRI and many Chinese companies’ strategic pivot to market diversification following Trump 1.0. This trend was covered in-depth by a recent Straits Times analysis titled “China’s great green march across the globe”, to which CEF also contributed. 

And Caroline will follow up with her CEF China Electricity Monthly as soon as all the data is out, but to front run the key point, it is great to see that China’s NBS report thermal power demand is down an unprecedented -4.1% year-on-year year to date April 2025 (-2.3% yoy for the month of April 2025). Four months doesn't confirm a permanent trend, but it is a bloody good start. China is on track to peak electricity sector and national emissions six years ahead of their NDC.

>>> Meanwhile Australia needs to urgently act on its opportunity to partner with China on clean energy and industrial transition. See CEF China analyst Caroline Wang’s presentation ‘Australia-China green economy cooperation for a resilient net zero future’, and her recent op ed in the Lowy Interpreter, ‘If Australia is serious about becoming a renewable energy superpower, China must be part of the answer’.

>>> See our additional commentary on world leading Chinese battery giant CATL and its record-shattering IPO in Hong Kong, on the BBC and in the FT.

AJ for Tim, Matt, Caroline and Fatima at CEF.

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