2026 is shaping up to be a positive year for wind energy generation with the potential for costs to stablise and investors showing growing interest.
This week a US investment giant, KKR has shown its confidence in Australia’s renewable energy industry, injecting $603 million into local asset manager HMC Capital.
The investment sees the US investment giant, which had up to $790 billion of assets under management as of the end of 2024, become a strategic partner in HMC’s 5.7GW BESS and wind development pipeline.
The financial news comes at a time when one report from the leading science agency CSIRO predicts the capital cost which predicts a five per cent drop in wind capital costs in this financial year.
The good news for the sector follows some barriers in recent years with its report showing a 35 per cent increase in 2022–23, an 8 per cent rise in 2023–24 and a 6 per cent hike in 2024–25.
Powering ahead
HMC Capital are already behind the 600MW Kentbruck wind farm in south-west Victoria, which recently got the go ahead from the Victorian Government.
KKR said of the partnership with HMC, it recognised the “considerable” investment needed to realise Australia’s renewable energy transition. The firm said forming ties would enable KKR and HMC to “significantly scale” the latter’s established platform.
“Delivering Australia’s ambition will require investment in flexible infrastructure such as battery storage to keep the grid secure and reliable,” KKR partner and head of Asia climate strategy Neil Arora said.
“By leveraging KKR’s global network, operational expertise, and deep experience across our climate, energy and infrastructure teams, we are well positioned to scale this platform and contribute meaningfully to Australia’s decarbonisation objectives.”
HMC Capital managing director and chief executive officer David Di Pilla said KKR’s investment would enable HMC to play a significant role in Australia’s net-zero-by-2050 transition.
“KKR’s capital will enable the platform to materially grow operating capacity, cash flow and progress the strategically valuable development pipeline,” he said.
The transaction follows KKR’s $1.7 billion acquisition of independent power producer Zenith Energy in June last year, which Zenith said would strengthen its capacity to “scale renewable and hybrid energy solutions across Australia’s most remote and energy-intensive industries”.
KKR also formed a $500 million partnership with CleanPeak Energy in July 2025 to grow its Australian distributed energy platform.
All up, KKR has invested more than $US44 billion into “climate and environment sustainability” investments since 2010.
Following approval from Australia’s Foreign Investment Review Board, the partnership is set to be finalised in mid-2026.
A better year
The CSIRO revealed the positive news to the onshore wind sector in its draft GenCost 2025–26 report.
“As the historical data indicates, onshore wind is one of the technologies which has been most impacted by recent global inflationary pressures,” it noted
“Onshore wind costs are showing tentative signs of stabilising after experiencing the largest increase in 2022–23.”
CSIRO suggested that near-term cost reductions for wind come from the “slow unwinding of inflationary pressures” that have “temporarily placed costs above the underlying cost curve”.
Wind capital costs have increased in recent years as large-scale solar and battery costs have gone the other way, with large-scale solar experiencing 8 per cent reductions in both 2023–24 and 2024–25, while large-scale, two-hour batteries experienced 20 per cent and 15 per cent cost declines across the same years, respectively.
More affordable
Rystad Energy senior analyst David Dixon said that while the cost of building solar and batteries is getting more affordable as “the efficiency of battery and solar cells gets better over time”, wind turbines have been getting larger and more costly.
“Vestas, the biggest turbine supplier to the Australian market, was loss making for a period of time, and had to increase prices to get back in the black,” he told Prime Creative Media, the proprietor of Utility magazine.
“A few turbine commodity inputs went up in price as well, so the wind market has experienced a double whammy of cost inflation and the need to get back to profitability.”
Dixon noted that wind farms have also faced rising labour costs and service challenges.
“Because the turbines are bigger, you’re limited with the cranes you can use to lift the turbines up, meaning many wind farm developers are restricted to a narrower set of service providers,” Dixon said.
While Australia approved 6.9GW of onshore wind capacity in 2025, wind farms are getting larger, meaning approved capacity is high but the number of projects greenlit is low.
These metrics are flowing into the latter part of project development, with only two wind projects in the NEM (0.46GW) reaching a financial investment decision in 2025. This was down from 1.97GW in 2024.
But wind remains critical to Australia’s energy future, with 26GW of utility-scale wind capacity required by 2030 to meet emissions reduction targets, according to estimates from the Australian Energy Market Operator. So good news on lowering costs is welcome.
