Voters in Australia are due to go to the polls in May in the country’s federal election and those in the renewables industry are growing more nervous about a potential Liberal Party victory. And state elections in Western Australia, South Australia, Victoria and New South Wales in the next two years could dramatically change the investment landscape too.
President Trump has shown incoming leaders how to make rapid changes when they seize power, including in the energy sector. With an election looming in Australia, investors in the country’s renewables industry are getting nervous of similar seismic changes.
By 17th May, Australia must hold its next federal election. Pollster YouGov reported on 14th February that Prime Minister Anthony Albanese from the Labor Party is likely to be replaced by Peter Dutton from the Liberal Party, who leads the country’s opposing coalition.
Such a result would be concerning for investors in the wind industry due to Dutton’s backing for nuclear and fossil fuels, and lack of interest in renewable energy.
Debate about the future of renewables including wind is an issue at state level too. On 8th March, Western Australia is set to hold its state election, where Labor is on track to stay in power despite an expected swing against the party. Despite that, it is likely to come under pressure from the Western Australia National Party to give communities bigger say in the planning process for utility-scale renewable energy developments.
Critics of renewables are on the rise and so these elections will bring intense scrutiny of Australia’s plans to achieve a transition to renewables. State elections are also due in South Australia in March 2026, Victoria in November 2026, and New South Wales in January 2027. The future of renewables in Australia may fundamentally change in the two years.
Despite this pressure, Albanese’s party has taken steps to increase support for renewables, even while other parts of the world are moving in the other direction, including the US under Trump. This month, Labor’s ‘Future Made in Australia’ plan passed through the Australian Senate. Labor wants to use A$13.7bn of tax breaks to kickstart green industries by boosting critical minerals processing and green hydrogen.
In 2024, Australia had its best year for renewable energy investment since 2018, with A$9bn of capital commitments. This includes seven utility-scale renewables projects totalling 1.6GW and worth A$2.4bn in the fourth quarter of 2024.
Such investment leaves Australia on course to hit its goal of 82% electricity production from renewables by 2030. In total, 4.3GW of generation capacity was greenlit for construction in 2024, worth A$9bn.
But the Dutton-led coalition is looking to reverse this. His efforts are being funded by firms in the fossil fuels industry, who are providing significantly more backing for the Liberal opposition in this election than the incumbent Labor. This is a change from the last election, when the Liberal and Labor parties received fairly equal funding levels from fossil fuels firms.
Specifically, the Dutton-led coalition is keen to invest in nuclear reactors, both large and small modular reactors, instead of wind and solar. But critics from the renewables sector have argued that nuclear is not a quick fix and that, in the meantime, it would keep the Australian energy mix more reliant on coal-fired power stations. Essentially, it becomes a strategy that relies on keeping fossil fuels operational for longer.
However, growth in Australia’s wind sector is far from assured, even under Albanese. We are seeing investors in the nascent offshore wind sector questioning their plans, for example.
In 2024, the Australian government awarded feasibility licences for 12 offshore wind projects totalling 25GW in the Gippsland region of Victoria, to companies backed by companies including Copenhagen Infrastructure Partners, Corio Generation, Iberdrola and Ørsted.
Under Albanese’s leadership, it has also formally declared five areas for offshore wind development: Gippsland, Victoria; Hunter, New South Wales; Southern Ocean, Victoria; Illawarra, New South Wales; and Bunbury, Western Australia.
This was all intended to kickstart rapid growth in the country’s offshore wind sector and take advantage of the up-to-5,000GW offshore wind potential identified by the Global Wind Energy Council.
Competition was strong in the Gippsland zone, with a reported 37 applications across the 12 sites, and the award of four additional sites in the Gippsland zone in January: Port Albert, Golden Beach, Leongatha and Sale. Despite this, we are seeing less activity in other zones, with developers ending some projects.
For example, at least three developers — Alinta, Oceanex and Skyborn Renewables — have reportedly abandoned applications to build offshore wind farms off the coast of Western Australia. This is in part due to a 40% rise in the costs of building offshore wind farms, but also the reliance of these projects on floating wind technology that is yet to achieve commercial maturity; a lack of regulatory and auction support for companies in the sector; and community opposition.
Meanwhile, BlueFloat and Equinor have either stopped or reduced the scope of projects off the coast of New South Wales. This is thought to be due to the economic challenges of floating wind developments and concerns about the quality of the wind resources off New South Wales.
By contrast, the strongest winds tend to be off the coasts of Victoria, including the Gippsland zone, and off Western Australia near Bunbury,
Dutton has committed to scrap the offshore wind zone off the coast of Port Stephens and the Hunter region of New South Wales if the coalition he leads wins power at the national election. He may also follow the President Trump playbook of pledging to delay any progress in offshore wind projects, and potentially cancel all support.
The industry isn’t quite there yet. The 12 Gippsland projects are in progress, and offshore wind projects rely on support at both state and federal level to make them happen. But wind watchers are on alert.
Kane Thornton, chief executive of Australia’s Clean Energy Council, warned in December that Dutton’s statement would “send shockwaves through offshore wind investors and risks undermining investment confidence in offshore wind and other energy and infrastructure sectors across Australia”.
Thornton added that the offshore wind industry in Australia “requires long term certainty to provide the confidence to develop and invest in these significant and long-term assets”. It will take until May before the sector has a chance of gaining that certainty.
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