Australia must invest AUD 3.56 trillion to decarbonize power sector by 2030, says BNEF

New modeling from BloombergNEF (BNEF) reveals that Australia needs to rapidly decarbonize its power sector to meet its 2050 net-zero goal, requiring an investment of AUD 3.56 trillion ($2.4 trillion) by 2030 and a 135% increase in renewable energy capacity to over 126 GW.

BNEF’s New Energy Outlook report emphasizes the urgent need to transform Australia’s energy mix, phasing out all unabated coal and nearly all unabated gas generation by 2035. The country will need to rely on renewables paired with flexible technologies like batteries and pumped hydro.

BNEF’s report modeled a net-zero scenario (NZS) aligned with limiting global warming to 1.75°C by 2050. In this scenario, Australia will heavily electrify its power, transport, and building sectors, driving electricity demand up 2.5 times and boosting solar and wind capacity to 290 GW by mid-century. Energy storage would need to expand from 3 GW today to over 59 GW.

This transition, though costly, is only 12% more expensive than a baseline scenario but offers far better outcomes for achieving net zero. BNEF energy transition specialist Caroline Chua emphasized that Australia would still need significant investment in its energy system regardless of decarbonization efforts.

The report also highlights the importance of scaling up technologies like electric vehicles and hydrogen to meet net-zero targets.