The future of Australia’s energy sector was a key battleground in the 2025 federal election. Renewables emerged victorious, but where does the transition go from here?
With two contrasting energy policies on the table, the 2025 federal election was – as Clean Energy Council Chief Executive, Kane Thornton, puts it – “a referendum on renewable energy”.
As the dust settles, the Australian Labor Party is celebrating a landmark majority win, but while the public have favoured renewables over the Liberal Party’s nuclear policy, there’s still a long road ahead to get to net zero.
To explore what the next three years might look like for the sector, Utility revisits the Federal Government’s energy policies and promises, and shares key industry responses to the 2025 election result.
Net zero
Australia’s current decarbonisation goals are to achieve a 43 per cent reduction in 2005 emissions levels, and net zero emissions by 2025.
Prior to the election, the Australian Labor Party confirmed that it would continue with the steps outlined in its Net Zero Plan if re-elected.
The Federal Government also said if it retained power, Australia would remain a party to the Paris Agreement and would announce a 2035 interim emissions reduction target as part of the 2025 Nationally Determined Contributions (NDCs) report.
Power generation
Decarbonising the electricity sector is the first step in the Federal Government’s plan to hit the 2030 emission target, and the industry has been powering ahead on a record number of renewable energy projects to deliver the 82 per cent renewable energy by 2030 target.
The Labor Party said if re-elected, it would continue to follow the optimal development path (ODP) outlined in AEMO’s 2024 ISP to reach the country’s net zero goals.
The full approach is detailed in the Federal Government’s Powering Australia plan, which included expanding the Capacity Investment Scheme (CIS) to deliver a total of 32GW of new, renewable capacity by 2030; establishing a new National Energy Transformation Partnership; and modernising Australia’s energy grid to support this renewable generation via the Rewiring the Nation program.
The Labor Party said if it were to retain power, it would also continue to prioritise the establishment of a multi-billion-dollar offshore wind industry.
Home battery rebates
In April 2025, the Labor Party announced it would roll out a $2.3 billion Cheaper Home Batteries Program if it were re-elected.
The program is expected to roll out from 1 July 2025, reducing the cost of a typical installed battery by 30 per cent. The Federal Government said the program is expected to result in over one million new batteries expected by 2030.
The discount is set to be delivered through the existing Small-scale Renewable Energy Scheme.
Industry responses
The sector has responded, here’s what key energy leaders and associations had to say.
Clean Energy Council: election delivers a mandate for clean energy
The Clean Energy Council has congratulated the Australian Labor Party on a decisive and historic victory at the 2025 election, which it said was a vote of confidence by the Australian people in the nation’s clean energy future.
Clean Energy Council Chief Executive, Kane Thornton, said the re-election of the Federal Government provides continuity for strong and effective policy that is critical to underpin new investment in clean energy that will in turn deliver lower power prices for all Australians.
“This election was a referendum on renewable energy. The Australian people have reconfirmed their strong support for wind and solar backed by batteries, pumped hydro and a small amount of gas,” Mr Thornton said.
“It’s now time to leave the politics behind and get on with the job of rolling out renewable energy to deliver affordable and reliable power for all Australians.
“We look forward to working with the Federal Government and the next Australian Parliament to ensure strong, stable and effective policy for the transition to clean energy,” he said.
The Clean Energy Council said that since the Federal Government was elected in 2022, significant progress has been made in accelerating the nation’s clean energy transition, underpinned by a range of policies including the Capacity Investment Scheme, accelerating the upgrade of Australia’s electricity networks and passing the Future Made in Australia Act.
“We look forward to working closely with the government to ensure these policies maximise investor certainty and deliver lower power prices and enormous benefits to communities throughout rural and regional Australia. This also includes ensuring the effective design and implementation of the [Federal] Government’s promised Cheaper Home Batteries rebate program, much-needed reform to environment and planning laws and reform to the energy market to ensure clearer incentives for new investment, including for long duration energy storage,” Mr Thornton said.
Mr Thornton called for the need to continue working together to educate and engage the public, and said that the Clean Energy Council launched a public information campaign, Clean energy works for Australia, earlier in 2025, which is aimed at helping to tackle growing mis and dis-information about the clean energy transition and technologies.
“Since the beginning of this year we’ve shared the facts and reached millions of Australians through organic media, paid and social media platforms and we must continue this work,” Mr Thornton said.
“It is clear that Australians were hungry for fact-based information throughout the 2025 election campaign, with tens of thousands of Australians visiting the Energy Fact Check website searching for answers to questions around ‘reliability’ and ‘cost’ of renewables – as the two most commonly sought-after fact-checks,” he said.
Rewiring Australia: Australia to get cheaper, cleaner energy
Rewiring Australia said the election result paves the way for the Australian Labor Party’s meaningful commitments, such as home battery subsidies, to be implemented.
The Federal Government made an election commitment to subsidise the cost of installing home batteries by 30 per cent, with the policy coming into effect by July 2025, and Rewiring Australia said its research found adding a battery to an average home would generate about $900 a year in savings, when working in conjunction with rooftop solar and all-electric appliances.
Rewiring Australia Founder and Chief Scientist, Saul Griffith, said that this is a good policy that will drive down power bills.
“Upfront costs are a big barrier to entry when it comes to home batteries, so knocking 30 per cent off the price of installation is a great step in the right direction,” Dr Griffith said.
Rewiring Australia also said it was relieved that the existing effective policies supporting the adoption of electric vehicles (EVs) – including the EV Fringe Benefit Tax exemption and the New Vehicle Efficiency Standard – are no longer under threat, after the Liberal Party claimed it would abolish these policies if elected.
Rewiring Australia CEO, Francis Vierboom, said the EV tax break makes economic sense for a lot of people.
“Petrol cars cost a lot of money to run, and they are also big polluters. Making it easier for people to switch to an electric vehicle makes sense for our wallets, and our air quality,” Mr Vierboom said.
Rewiring Australia also said that the continuation of a Federal Government lead by the Labor Party will also ensure the Australia remains committed to achieving 82 per cent renewable energy by 2030.
“Labor started this journey in 2022 and now it can get us closer to finishing it. We must remain focussed on expanding renewables and creating cheaper and cleaner energy for all Australians,” Mr Vierboom said.
“We are looking forward to working with [the Federal Government] to achieve its renewable goals, and we also want to encourage the government to continue to accelerate electrification and bill savings for Australian households – including finance that works for low income homes, a strategy for rental energy bills, and further incentives to drive down the upfront cost of electrification.
“Too many homes are missing out, and more pathways to household electrification means lower bills and lower emissions sooner.”
Energy Efficiency Council
The Energy Efficiency Council (EEC) said the election result sets the stage for a big ramp up in ambition on emissions goals, efficiency and electrification.
EEC CEO, Luke Menzel, said the Federal Government’s previous term was marked by some significant wins on energy and emissions, including the reformed Safeguard Mechanism, vehicle efficiency standards and the CIS.
Mr Menzel said there were still a number of policies on efficiency and electrification still sitting on the to-do list.
“Acting on them quickly will be critical to drive down energy bills and ramp up Australia’s emissions reduction effort,” he said.
“With the nation’s trajectory to a high penetration renewable energy system now locked in, any additional cuts in carbon emissions will need to come from the demand side.
“We’re looking forward to working with the Federal Government to get it done.”
Australian Energy Council: delivering on the energy transition
The Australian Energy Council (AEC) congratulated the Labor Party on its re-election and encouraged the Federal Government to prioritise sustainable, enduring energy policies that provide investment certainty at lowest cost.
AEC, Chief Executive, Louisa Kinnear, said that diverse energy policies were put forward during the election campaign and now it is paramount we get behind the energy transition and ensure it can deliver affordable, reliable and lower emissions electricity.
“We are in the middle of an era-defining energy transformation that requires policy stability, continuity, and long-term reform that can endure beyond election cycles. We encourage all members of the 48th Parliament to commit to working to deliver the energy transition for the benefit of Australians,” Ms Kinnear said.
“The energy system of 2050 will be delivered by wind and solar, backed by hydro, storage and gas. There is more work to be done to develop the market settings that will deliver this outcome, whilst managing the energy trilemma of affordability, reliability and sustainability.
“The right market settings will provide investors with the confidence to deliver the right energy source at the right time to replace existing thermal plant like coal that will retire over the next decade and beyond. This approach will avoid system and price shocks and deliver least-cost outcomes for consumers.”
The AEC said it believes the key energy priorities for the Federal Government’s upcoming term are:
Focusing on affordability
The energy transition is a huge undertaking, requiring unparalleled levels of investment in networks, storage and replacement generation. The AEC said it is crucial that the transition proceeds at least cost to consumers, requiring both industry and government to have affordability front of mind as they make decisions. It also said it is important to recognise that bills are unlikely to significantly reduce in the near term and be upfront with consumers about this, with targeted financial support available to vulnerable customers to ensure nobody is left behind.
Harnessing consumer energy resources (CER)
Coordinating energy from rooftop solar and battery systems will help reduce system costs. With more than four million rooftop solar systems across Australia, services like retailer-led Virtual Power Plants (VPPs), will help to deliver network and system cost reductions. The AEC said that the Federal Government’s election commitment supporting consumer batteries is a positive one, but this program would deliver greater economic benefits if it were coupled with an incentive for customers to share the value of that battery by participating in a virtual power plant.
Backing in the NEM Review
The AEC said it supports the consultative approach taken by the Expert Panel during the first phases of the NEM Wholesale Market Settings Review. According to the AEC, this review is critical and must support market-based solutions that drive investment in energy sources that can provide firm energy in a high-renewables system – and the industry body is calling on all jurisdictions to continue to work constructively with the Federal Government to support the review process.
Prioritise system security
The AEC said that the market does not currently value the full range of system security services needed for a net zero emissions system. As the system prepares for thermal plant exits, the AEC said essential system services must be better valued through the establishment of spot markets for services like inertia, which is needed to keep the system stable.
Ensuring gas supply for electricity generation and retail
Gas will be a critical fuel to support a transitioning energy system, and more gas fired generation will be needed than is available today, albeit used less frequently. The AEC said the Federal Government should continue to work with industry to develop market-based approaches rather than price or supply interventions that can ensure adequate supply of upstream gas into the future, with further intervention a last resort.
Ms Kinnear said there is sufficient understanding across the energy industry about the critical factors that will deliver the lowest-cost transition, but now we just need consistent, enduring and coordinated policy.
“The AEC encourages the use of market-based incentives that support long-duration storage, gas supply and generation and better coordination of energy generated from rooftop solar systems in ways that work for all customers,” she said.
“We look forward to working with the Federal Government and the next Australian Parliament in support of strong, stable and effective energy policy.”
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