1 SEPTEMBER 2026

Welcome to our news round-up. See previous issues here.

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IN NEPAL, GLACIERS MELT & HUNDREDS DIE; HERE, STATES LOBBY FOR FOSSIL-FUELED DATA CENTRES

We all saw the shocking scenes last week as a glacier collapse in the Himalayas produced a biblical flash flood on the Nepal-Tibet border, obliterating everything in its path. The impact was such that it triggered seismic activity signalling an earthquake. Panicked people tried desperately to outrun a churning wall of water metres high. Over 800 are dead, swept away in the raging torrent, with many more missing, villages and infrastructure destroyed, and scores of Australians unaccounted for at the time of writing. 

Like the heatwaves, drought and fires in Europe and Canada this northern summer, this is yet another of the consequences of the rampant destructiveness of the fossil fuel industry, privatising massive profits while socialising the existential costs of climate catastrophe in a relentless cascade of globe-spanning disasters, abetted by spineless political puppets. 

The time for excuses is long over. Yet back home, on the same day as the Nepal disaster, media reports suggested that at a national cabinet meeting, PM Anthony Albanese had walked back his government’s commitment to legislate that the rapidly burgeoning data centre rollout here be powered with 100% renewable energy as a condition of approval, capitulating to the NT and Queensland governments’ demands for exemptions. It was understood that the PM had granted those states carve-outs from the clean energy provisions. 

Previously, Minister Bowen had made assurances that the federal government would use its constitutional powers to override these states’ objections to the renewables mandate, requiring that the centres’ proponents – foreign tech broligarchs – BYO additional clean energy. Albanese and Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton had similarly positioned clean energy as pivotal to data centre policy.

Minister Bowen subsequently denied that concessions had been made. He reaffirmed that nationally consistent standards embodied in Commonwealth legislation will require data centres to be “run by renewables, with peaking and firming using gas”. These standards, he said, will cover “every state and territory including NT and QLD without exceptions”. 

According to Bowen, the only change from the government’s previous position is that “if a state-owned energy firm feels that they can power a data centre cheaper than with renewables, they can make that claim to the Federal Government. We’ll have the Australian Energy Regulator … assess it”. In Bowen’s view it’s a case of ‘nothing to see here’, since “it would be very, very difficult indeed for a state energy company to establish to the Commonwealth's satisfaction” that fossil fuels are cheaper than renewables.

This clarification is welcome given data centres are an issue of major and growing national significance, and Australia’s federation based government structure is challenged by the Queensland LNP’s climate science-undermining. The scale of the data centre energy burden is huge: these behemoths’ share of consumption in the National Electricity Market (NEM) was projected in August by AEMO to rise sevenfold to 13% by 2036. This figure appears to be escalating rapidly from AEMO’s previous estimate in June. There are upwards of 220 data centre proposals on the table, with 165 already in operation. 

We note the Albanese government’s record of unconscionable approvals of new coal and gas and its capture by fossil fuel vested interests. This dissonance undermines its brilliant strides on large-scale and distributed renewables, and means it is failing to properly tax gas multinationals’ profits to return some benefit to the people, or to put a stringent enough price on carbon to force industrial climate laggards to decarbonise, or to reform the $11bn annual imported diesel subsidy.

The pace of the AI revolution is unprecedented. The boom presents a massive investment opportunity for Australia, and could and should be leveraged in the national interest to accelerate our energy transition for the good of all. The government has one chance here to get data centre policy right from the outset – it is the Albanese administration that will set the terms for how this dramatic social, economic, and technological transformation is managed, and its era-defining impacts on Australians. 

This requires political courage and regulatory rigour.  Any backflip puts at risk our emissions reduction targets of 43% by 2030 and 62-70% by 2035 (new emissions reduction figures released last week by DCCEW show a 1.6% reduction in the year to March 2026, not fast enough to achieve our goals, although electricity emissions dropped 3.7%). It would accelerate the already very evident escalating climate catastrophe. And it would further erode the almost nonexistent social licence for these gigantic monoliths to late-stage capitalism, as local community opposition grows.

CEF spoke at a recent data centre conference where the industry itself was mostly aligned with the Federal government’s position that the industry must be required to bring water and new zero emissions energy solutions to the table or risk its already fragile social licence to operate. Failure to do so would see the sector follow the delays and cost blowouts apparent in our grid transmission and wind sector buildout. 

QLD Premier Crisafulli continues to agitate, suggesting Bowen’s position is at odds with Albanese’s "maturity and pragmatism”. We urge the government to resist any further pressure from the states, and move quickly to legislate the binding requirement for firmed renewable energy – avoiding loopholes the coal and gas-addicted states may seek to exploit. This condition should be coupled with the public benefit principles we and our partners outlined here, including that data centres strengthen grid stability, be appropriately sited to minimise impacts on nature and land, use scarce water resources responsibly, operate with transparency, and earn ongoing social licence.

The alternative would make the Albanese government complicit in fueling a cascading climate polycrisis that has people literally running for their lives, just as the super El Niño arrives on our doorstep.

>>> See our previous op ed in PV Magazine on data centre policy

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INVESTMENT SECURES CLEAN ENERGY FUTURE OF AUSTRALIA'S LARGEST ALUMINUM SMELTER

August 2026 saw the NSW and federal governments announce an agreement to jointly invest $2.5bn over 10 years to secure the future of Australia's largest aluminium smelter, Rio Tinto’s NSW Tomago Aluminium, including concessional financing from the Clean Energy Finance Corporation. 

Tomago consumes around 12% of NSW’s energy. Rio has long threatened closure with the end of its long term subsidised coal-fired power supply contract in 2028. Now Rio and partners have agreed to invest $1.1bn in modernisation and decarbonisation on top of the $2.5bn state and federal investment package. The joint investment will underpin nearly 3GW of new renewable generation and firming capacity, unlock demand response management capabilities to enhance grid reliability and transition Australia's largest single electricity user toward 100% renewable power by 2033, while securing over 1,000 direct jobs. 

This is a necessary and welcome move to protect Australia’s sovereign manufacturing capabilities. The world is embracing decarbonisation. Tomago is >95% export focussed,  meaning green aluminium exports – produced using renewable energy – are the only viable path forward. The need for a massive subsidy would be dramatically reduced or removed if there was an Asian CBAM.

Renewables firmed by BESS plus DRM (demand response management, flexing down production when the grid is stressed and power prices are too high) supported by pumped hydro storage and gas peakers is the internationally cost competitive solution. Gas will play an important, but small and declining role in grid resilience (it is currently <5% of the total NEM electricity generation).

The deal includes a profit-sharing arrangement with taxpayers when the aluminium price crosses a certain price threshold that remains commercial-in-confidence, as Kate Burgess reported in The Energy.

This model of industry support is appropriate for a critical, nationally strategic industry under FMIA, with serious co-investment from the private partner and public benefit upside.  Well done to our colleagues, including Oliver Yates, for coming up with the Scheme Finance Vehicle concept for Tomago, and for advocating successfully to give the government confidence in an enduring solution.

We do note that Australian value-added facilities are strategically challenged in the absence (outside of the EU/UK’s CBAM) of a clear carbon price signal in international trade that values embodied decarbonisation, that is, export commodities produced using clean energy.  See Matt Pollard's June 2025 report "A Price on Carbon: Building Towards an Asian CBAM".

>>> See the Tomago media release by our partners at the SEC.

>>> Hear Tim re Tomago on ABC Radio Sydney, and ABC Hobart, and see his commentary in Michael West Media, The Energy, and across News Corp papers including The Daily Telegraph.

On a related note, we join the Clean Energy Investor Group, Investor Group on Climate Change and our partners in the Climate Capital Forum in welcoming the federal government’s decision to extend the transition period for the new capital gains tax regime on foreign investment from 2030 to 2040, after strong advocacy from the above. As CCF notes, this is an Important outcome that hopefully means that critical foreign investment in our much needed renewable energy infrastructure and decarbonising innovation is not cut off by tax changes that deter investors and send them elsewhere just when we need it the most.

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PORTUGAL TAXES OIL WINDFALL PROFITS 33% – & WE CAN’T EVEN HAVE A 25% GAS EXPORTS LEVY??

Portugal's government has approved a 33% windfall tax on the extraordinary profits to oil companies from the energy ‌price surge triggered by the US war on Iran, as reported in Reuters.

PM Albanese and Treasurer Chalmers are fully aware that Australians all pay the price for fossil fuel wars. Meanwhile a select group of multinational corporations operating in Australia gets to book war-profits through zero merit. How about sharing the gains of the few corporations who benefit? 

Australia could – and should – introduce a 25% export fossil gas levy, or more simply and equitably introduce a war-profits sharing scheme like Portugal. This could help fund some much needed permanent measures to hasten our transition to a clean energy economy – for example accelerated public investments in EV enabling infrastructure for both freight and passenger vehicles. Despite the inevitable bleating that would follow, there would be zero impact on Japan, although INPEX Corporation would have to share some of their temporary gains.

Woodside Energy just reported a 27% jump in after tax profits for the first half of calendar 2026 to $1.67bn, yet, disgracefully, new CEO Liz Westcott has done another climate walkback and scrapped its ill-priced plan to invest $US5bn in new energy products by 2030, alongside its scope 3 emissions abatement targets. Likewise Santos reports profits are set to surge in 3QCY2026.

It is past time for our leaders to act, both on ensuring Australians get their fair share – and on making polluters pay a price for their climate-destroying emissions and to invest now in decarbonisation opportunities, rather than funding lobbying campaigns to prevent Australia’s efforts to align with the starkly clear climate science.

On the latter point we note the self-interested and misguided lobbying from the BCA in the AFR asserting that action to align with the climate science by enhancing the Safeguard Mechanism is all too costly, totally ignoring the rapidly rising cost of inaction to all Australians: increasing extreme weather events  –  just ask Nepal, France or Canada – rising insurance costs and the existential economic risks for Australia as our key trade partners pivot to zero emissions industries of the future.

Reporting the views of climate science deniers and their political puppets, the Australian Fossil Fuel Review ignores the US$2.3 trillion invested globally in 2025 in electrification and decarbonisation, the profit BHP, for example, booked in 1HCY2026 alone from its growing investment in copper and its massive US$45bn capex plans as a result, and the fact that finance and households are investing record amounts in batteries, rooftop solar, wind and grid infrastructure today across Australia.

The minor cost of meeting the Safeguard Mechanism’s ratcheting up mechanism is reported as though the federal government is about to increase the price on carbon pollution by 500% tomorrow. Minister Bowen has been constructively working with industry, finance and communities to progressively build positive momentum. And the results are evident in lower electricity prices in 2026 despite the latest fossil fuel war in the Middle East by Trump (as we detail below).

Australia can embrace industries of the future and the US$500bn of new investment Boston Consulting Group says Australia can unlock over the coming decade alone, or simply be left behind, stagnating as a zero value add quarry to the world.

To allay the BCA’s fear-mongering of a $200/t for carbon pollution, let’s bring in a legally binding floor price that ratchets up 2-3% pa in real terms from the current $35-38/t. That would give investors certainty and avoid the AFR having to report 500% increases as though anyone is even talking seriously about that.

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DOWN, DOWN, ELECTRICITY PRICES DOWN… IN THE MIDDLE OF GLOBAL FOSSIL FUEL CRISIS

Ambitious policy and strategic investment to accelerate the energy transition is insulating Australians from an electricity price crisis at the scale of the 2022 shock triggered by Putin’s invasion of Ukraine. 

Origin Energy’s FY26 results presentation last month includes a simply amazing chart showing electricity and gas price deflation in the middle of the latest fossil fuel war in the Middle East (see above). Global LNG and oil prices are surging, and yet Australia's wholesale electricity prices are deflating!

The Default Market Offer (DMO) from the Australian Energy Market Operator is down from 1 July 2026. More renewable energy generation firmed by a massive buildout of batteries – utility scale BESS and behind the meter distributed batteries – is underpinning downward pressure on prices and preventing price surges as per 2022. This includes the record 2,000 home battery installs per day catalysed by the federal government’s brilliant Cheaper Home Batteries scheme. And the recent announcement by NSW Energy Minister Penny Sharpe of an upfront discount scheme for battery storage systems installed by businesses and apartment buildings, cutting installation costs by around 20% to 40% (see commentary by Tim here).

This scenario is a massive contrast to war driven fossil fuel price hyperinflation under the climate denialist, coal and gas-fixated, anti-renewables Morrison government which drove oil, gas and electricity prices through the roof and fueled the cost of living crisis and escalating mortgage costs. 

Kudos to Energy Minister Chris Bowen for his leadership in transitioning Australia to clean, reliable, lower-cost firmed renewable energy – the only permanent solution to provide both affordable energy and the energy independence that decouples us from expensive and dirty fossil fuels subject to volatile geopolitical forces.  

A further development announced by Minister Bowen this past month was the expansion of the solar discount under the Small-scale Renewable Energy Scheme (SRES) from 100kW systems to 1,000kW. This will reduce the installation costs for commercial & industrial (C&I) and agricultural buildings by ~20%, with a potential boost in solar power of over 80GW. Critically, Minister Bowen is also requesting the Australian Energy Market Commission (AEMC) to consider a rule change to require the network providers to expedite approvals of C&I solar and avoid gaming the system to prevent much needed new investment. 

This policy direction was supported by a major new report from our colleagues at the Smart Energy Council, Unlocking the Missing Middle, which found that solar power on Australia’s commercial and industrial rooftops could generate energy equivalent to 10 of the nation’s largest coal-fired power stations.

Another strong step forward for Australia's energy system transformation to embrace electrification, decarbonisation and energy independence.

Key to this is electrification of our transport sector: EVs, freight and mining. 

Australia is the largest importer of diesel in the world – and our mining sector is the biggest user of imported diesel. In BHP’s FY26 report, the company acknowledges that “diesel displacement is the largest lever” it has to reduce operational greenhouse gas emissions, yet it pocketed around $548m in diesel Fuel Tax Credits in the year, as noted by Climate Integrity.

Time to stop having taxpayers line the pockets of our biggest, most profitable miners with an insane $11bn annual subsidy. CEF has proposed, and Fortescue agrees, that the refund should be capped at $50m per claimant pa, or even $60m pa, to ensure not a single farmer or trucking company would be affected. Any rebate above that should be retained by the miner only if it is deployed into decarbonisation, e.g., electric truck fleets, converting the subsidy into a Transition Tax Incentive that would align Australia's energy security and decarbonisation goals, providing a fiscal incentive for the likes of BHP and Rio Tinto to act on their supposed climate commitments, as global leader Fortescue is doing. 

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ROOFTOP SOLAR &  BATTERIES KEY TO IMPROVING FIRST NATIONS SELF-SUFFICIENCY & ENDING DEPENDENCY ON IMPORTED DIESEL

The US war on Iran at the start of 2026 gave Australia a major reminder of why energy security is yet another reason to embrace the energy system transformation – a permanent solution to our addiction to expensive, high emissions, volatile and scarce diesel and oil imported from the Middle East.

Nowhere is this need and opportunity more evident than in remote communities of outback Australia. For these communities, excessive dependency on imported diesel means energy insecurity is a near daily threat.

Across the top of Australia, around 200-300 communities, primarily Indigenous, between WA, QLD, SA and the NT, remain entirely dependent on generators powered by imported diesel for electricity. These diesel systems consume around 25 million litres of diesel each year in regional and remote Northern Territory alone. 

In Queensland, the state's Community Service Obligation costs under the Regional Electricity Subsidies (Uniform Tariff Policy) have reached $604m annually in FY2026, up from $537m two years earlier in FY2024. Western Australia operates a nearly identical framework known as the Uniform Tariff Policy (UTP), which costs Horizon Power (Regional & Remote WA) $240-270m, and Synergy (covering the South West Interconnected System) at a system cost of $671m annually.

Rooftop solar and batteries and virtual power plant technology solutions could permanently reduce this massive state budget subsidy, but it requires capacity building and up front capital, as well as political will and policy development, and ultimately a nationally coordinated approach. Australia has installed over 487,000 home battery systems in the last 12 months. Next to none have been installed in remote, end-of-grid and off-grid communities. Now is a great time to change this, permanently cut our exposure to imported diesel, starting with those most vulnerable in remote communities across Australia. 

In this oped Alistair Kitchen from Indigenous Energy Australia and Tim Buckley examine the situation in three remote First Nations communities at Lockhart River (Cape York in FNQ), Maningrida (500km east of Darwin in the Northern Territory (NT)) and Yarrabah (near Cairns, Qld), to understand historic efforts and the opportunity for a massive step up in electrification, decarbonisation and energy independence that could be unlocked with a relatively modest investment in upfront capital systems and capacity building.

>>> Read the full op ed.

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CHINA COAL POWER DECLINES IN JULY 2026 ON ENERGY GENERATION SLOWDOWN

The July 2026 electricity generation results for China show a slowdown in total electricity usage, in turn driving a decline in coal power for the month. 

In July 2026, China's electricity generation reached 1,041 TWh, a year-on-year increase of 2.9%. From January to July, the total electricity generation was 6,175 TWh, up 5.1% yoy.

Year to date in 2026, thermal power rose by 2.0%, hydropower rose 8.6%, wind power saw growth of just 1.8%, and solar power grew by 22.4%, a third slowdown compared to previous massive growth rates.

As of July, solar generation continues to be the second-largest fuel source, accounting for 13.7% of China’s total electricity generation YTD. This puts it ahead of wind power, with an 11% share.

Coal power generation remains dominant, holding a 53.7% share from January to July, up 2.0% year-on-year to date. However, it fell 3.2% year-on-year in July, marking the first monthly drop this year.

The pace of capacity expansion continues to slow in 7MCY2026.  China added 194.0GW of net new capacity in 7MCY2026, -40% yoy against the frenetic policy-deadline-driven rate of 7MCY2025, although July additions were up +12% yoy at 35.3GW.

Thermal accounted for 50.3GW of that, +20% yoy YTD (-26% yoy in the month of July) and 26% of all new capacity added this year - a slower rate than reported last month, but still unsustainable.

Solar additions were 86.2GW in 7MCY2026, 61% below 7MCY2025, although July shifted from decline to a +28% yoy rise, at 14.1GW. Wind added 47.1GW, 13% less than in 7MCY2025, including 8.5GW in July. 

With 6.8GW of new hydro, total renewables capacity added in 7MCY2026 was 140.1GW, or 72% of all capacity added. On an installed base of 4,078GW, renewables now account for 2,431GW, or 60% of total capacity, and zero emissions capacity 2,497GW, or 61%.

>>> For further details including other China energy sector development over July/August 2026, see our August CEF China Monthly Energy Update. Previous editions here.

>>> Read Tim’s commentary in the Australian Mining Review feature, Coal at a Crossroads, noting that “For every coal plant that China builds, they build about 10 solar plants, five wind plants, one offshore wind plant and about 500 batteries. China now exports more clean tech per month than US exports in fossil fuels per month. Its exports of clean tech are up 25% in the last three months versus the first three months of this year and they’re up 50% on where they were a year ago.” 

 In other China news…

Tim Buckley and CEF’s Head of Research Matt Pollard have just returned from China where they met with key cleantech leaders and witnessed China’s astonishing decarbonisation progress firsthand. 

Read Tim’s reflections here on their visit with Fortescue to an Inner            Mongolian open cut coal mine that has undertaken the largest commercial deployment of autonomous electric mining vehicles using battery swap recharging systems – 100 vehicles currently, to be tripled to 300 by end 2026. Fortescue has plans to deploy this technology in the Pilbara. As reported in the AFR, it has agreed to buy up to 200 battery-electric trucks from XCMG between 2028 and 2030. The trucks are expected to make up as much as half of Fortescue’s fleet of 300 to 400 zero-emissions haul trucks. Bring it on! 

Tim and Matt also visited global battery giant CATL’s headquarters in Ningde in Fujian province, witnessing the awe-inspiring scale of manufacturing, automation, focus on quality and RD&D investment from this firm now employing 213,000 people, 22,000 of whom work in R&D, with 1HCY2026 revenues up +55% and profit 42% yoy. Reflections here.

Another site visit was to the world’s largest single-site aluminium smelter China Hongqiao Group’s 2.03Mtpa capacity at Yunnan Hongtai. Hongqiao is China’s #2 integrated aluminium producer with total capacity of 6.46Mtpa, along with upstream alumina refining and downstream fabrication. Hongqiao is busy relocating a further 1.93Mtpa capacity, Honghe, to Yunnan from coal-power dominated Shandong, clear evidence of the owner-management driven decarbonisation commitment. With the combined Yunnan Hongtai and Honghe projects, 60% of total smelting capacity will be relocated to high renewable energy penetration provinces since 2020. Read Tim’s account here. 

• Ember reports China cleantech exports hit a new record high in July 2026 at US$27.3bn, +35% yoy on a 12 month rolling basis. As US 30 year bond rates hit a record high, the biggest beneficiary of Trump’s war on Iran is China's cleantech exports, skyrocketing as the world sees electrification and decarbonisation as the solution that provides energy security in a world of volatile fossil fuel import costs.

• Xinhua reports that in July, China’s domestic monthly sales share of new energy vehicles reached 68% for the first time, and the cumulative share exceeded 50% for the first time according to the China Association of Automobile Manufacturers. The electrification transformation of commercial vehicles is also maintaining rapid growth, with China's domestic sales of new energy commercial vehicles increasing by nearly 50% year-on-year in July 2026. China's automobile exports saw the proportion of new energy vehicles exceed 50% share for two consecutive months in July 2026.

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>>> Tim has been active discussing key insights on energy transition policy and finance in podcast interviews this month, including on The Greenroom –  outlining where the energy transition is really heading, and how finance will help decide the winners – and on the FS Sustainability podcast Greener Way and Spark Club, discussing Australia’s big bet on green steel.

>>> See our other media here.

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This newsletter is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice, nor is it an offer or solicitation of an offer to buy or sell, a recommendation, endorsement, or sponsorship of any security, company, or fund. CEF is not responsible for any investment decision made by you. Unless attributed to others, any opinions expressed are our current opinions only. Certain information presented may have been provided by third parties. CEF believes that such third- party information is reliable, and has checked public records to verify it wherever possible, but does not guarantee its accuracy, timeliness or completeness; and it is subject to change without notice.