Rajan Wilcox
Australia's energy needs are still largely met by fossil fuels. In 2021, coal and gas accounted for around 70% of electricity generation, with coal alone providing 64% of domestic energy production. Coal and gas are followed by oil, which makes up 34% of Australia's primary energy consumption, and natural gas, which is found in many homes and increasingly used in industry. However, renewable energy sources such as wind, solar, and hydro provided about 29% of Australia's electricity generation in 2021, and the country has committed to transitioning towards low-carbon energy sources.
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What You'll Learn
Australia's energy mix
Australia has an abundance of both renewable and non-renewable energy sources, including fossil fuels. The country's energy needs are still mostly met by fossil fuels, with coal, oil, and gas dominating the energy mix. Coal is the largest component, accounting for around 40% of primary energy consumption and generating about 75% of domestic electricity. Australia is the world's largest exporter of coal, and it underpins some of the cheapest electricity globally. Natural gas is also widely used, particularly in homes and industry, and oil is critical to the transport system, although some is imported.
Australia has significant uranium resources, estimated at 46% of the world's total, and is one of the largest exporters. The country also has substantial oil shale resources, especially near Gladstone, Queensland, and around one-third of the world's known economic uranium resources. These resources could provide additional liquid fuels if developed.
While fossil fuels dominate the energy mix, Australia also has a large renewable resource base, widely distributed across the country. Hydro energy, derived from water in high rainfall and elevated areas, is currently the largest renewable source of electricity, mainly in New South Wales and Tasmania. Wind power contributes around 2% of electricity generation, and other renewables are increasingly being utilised. Australia also has the potential to develop geothermal, wave, and tidal energy. The country also has the potential to develop bioenergy from organic matter, such as landfill or sugar cane waste, for electricity generation, heat production, and biofuel creation for transport.
The country has set climate goals, including doubling emissions reductions by 2030 and reaching net-zero emissions by 2050. By 2030, the government aims to achieve a clean electricity target of 82% renewable energy. Australia is thus working towards diversifying its economy and energy mix away from fossil fuel use and extraction.
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Fossil fuel alternatives
Australia's energy needs are predominantly met by fossil fuels, with coal, oil, and natural gas being the most used. However, the country also has an abundance of renewable and non-renewable energy sources, and the use of renewable energy sources is increasing.
The five primary alternatives to fossil fuels are renewable energy, nuclear power, hydrogen, biomass, and geothermal energy.
Renewable Energy
Renewable energy sources, such as wind, solar, tidal, and hydroelectric power, can be used repeatedly without depletion and are replenished quickly. In Australia, wind energy is growing rapidly, and solar energy is attracting investor interest.
Nuclear Power
Nuclear power is derived from controlled uranium atom splitting in a power station, creating nuclear fission. Australia has an estimated 46% of the world's uranium resources.
Hydrogen
Hydrogen is a low-emissions fuel alternative that can be produced using renewable energy. Australia has committed significant investment to position itself as a leading producer and exporter of green hydrogen.
Biomass
Biomass is biological material derived from living or decaying plants and animals, including wood, plant, forest residues, and compost material. Biofuels, such as bioethanol and biodiesel, can be used as standalone fuel sources or blended with petroleum and diesel, respectively. They burn cleaner than fossil fuels, releasing less carbon and pollutants, and can be produced more quickly from renewable sources.
Geothermal Energy
Geothermal energy is derived from the Earth's natural sources of heat, such as volcanic activity. Australia has geothermal resources in the form of buried, high-heat-producing rocks.
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Australia's energy exports
Australia is a significant net exporter of energy, with exports accounting for over two-thirds of production. The country exports coal, natural gas, crude oil, and uranium. In 2022-23, about 89% of black coal production, 73% of domestic natural gas production, and 97% of crude oil production were exported. Australia is the world's largest coal exporter, with coal accounting for more than half of its energy exports. The country is also one of the top exporters of uranium and is ranked sixth in liquefied natural gas (LNG) exports.
While Australia has a substantial renewable resource base, its primary energy consumption is dominated by non-renewable sources. Coal, oil, and gas account for around 40%, 34%, and 22% of the country's energy consumption, respectively. Coal alone generates about 75% of Australia's electricity, with gas contributing an additional 16%.
Australia's renewable energy resources, such as hydro, wind, geothermal, wave, and tidal power, are widely distributed across the country. However, their utilisation has been limited due to higher transformation costs, immature technologies, and distance from markets and infrastructure. Despite this, Australia's renewable energy sector is growing, with wind energy expanding rapidly.
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Energy consumption
Australia has an abundance of both renewable and non-renewable energy sources. Fossil fuels such as oil, natural gas, and coal are examples of non-renewable resources. In contrast, renewable energy sources can be used repeatedly without depletion or can be replenished quickly, such as timber, wind, sun (solar), and waves.
Australia's energy needs are primarily met by fossil fuels, with coal being the most dominant source. Coal accounts for about three-quarters of domestic electricity generation, and Australia is the world's largest exporter of coal. Natural gas is also widely used, especially in homes and industry, while the transport system heavily relies on oil, some of which is imported. Overall, coal, oil, and gas make up around 96% of Australia's primary energy consumption.
However, Australia also has a significant renewable energy resource base, widely distributed across the country. Hydro energy, derived from water in areas of high rainfall and elevation, is currently the largest renewable source of electricity, mainly in New South Wales and Tasmania. Geothermal energy, in the form of buried high-heat-producing rocks, is another potential source, along with wave and tidal energy resources, especially in Tasmania and the western and southern coastlines. Bioenergy, using organic matter like landfill or sugarcane waste, can generate electricity, heat, and biofuels for transport.
Australia's climate goals, established under the 2022 Climate Change Act, include doubling emissions reductions by 2030 and reaching net-zero emissions by 2050. The government aims to increase the share of renewable energy to 82% by 2030. To achieve these targets, Australia is implementing gas market reforms and a new critical minerals strategy to boost energy security during the transition to cleaner energy sources.
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Australia's energy goals
Australia has an abundance of both renewable and non-renewable energy resources. As of 2023, Australia's energy needs are still mostly met by fossil fuels. Coal, a non-renewable resource, generates three-quarters of domestic electricity in Australia. Natural gas is also widely used, and the country's transport system relies heavily on oil. However, Australia's energy sector is undergoing a significant transformation, with increasing shares of wind and solar power.
At the federal level, the Australian government sets national targets for renewable energy, emissions reduction, and energy security. The government has committed to limiting the global temperature rise to 1.5–2°C under the Paris Agreement, which requires transitioning away from fossil fuels towards renewable energy solutions. By 2030, the government aims to reach a clean electricity target of 82% renewable energy. To achieve this, Australia is implementing a new 2030 critical minerals strategy and gas market reforms to enhance energy security during the transition.
At the state and territory level, governments play a crucial role in managing energy policies and infrastructure. The Australian Capital Territory (ACT) and Tasmania have been pioneers in adopting renewable energy, with ACT achieving 100% renewable electricity by 2020 and Tasmania reaching its goal of 100% renewable energy by 2020, two years ahead of schedule.
While Australia has made progress in transitioning to renewable energy, there are still challenges to overcome. The country is a leading exporter of coal, LNG, and uranium, and its energy sector faces the task of incorporating increasing shares of variable renewables while maintaining flexibility, fuel availability, and resilient infrastructure. Additionally, community engagement is essential to developing social acceptance of essential infrastructure in the energy and critical mineral sectors.
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Frequently asked questions
Fossil fuels are non-renewable energy sources that take billions of years to form naturally from the remains of ancient plants and animals. Examples include coal, oil, and natural gas.
Australia's energy needs are still largely met by fossil fuels. In 2021, coal and gas accounted for around 70% of electricity generation, with coal alone contributing to about 75%.
Australia has an abundance of fossil fuel reserves, with coal mines and deposits located in Queensland, New South Wales, and Victoria. Natural gas is sourced from gas fields, such as Moomba and Bass Strait, as well as coal seam gas from Queensland. Oil, while a smaller proportion of reserves, is also produced and imported.
Australia has a diverse range of renewable energy sources, including wind, solar, hydro, and biomass. In 2021, renewable energy sources provided about 29% of Australia's electricity generation. The country also has the potential to harness geothermal, wave, and tidal energy.
