Australia's Coal Phaseout Puts Grid Reliability to the Test as Clean Energy Buildout Accelerates
Australia is shifting away from coal while expanding renewable generation, battery storage, and transmission links. Origin Energy extended the life of the Eraring coal station, the country's largest, until April 2029 because replacement infrastructure and flexible capacity are not yet fully in place. The country aims for 82% renewable electricity by 2030, and GlobalData expects renewable sources to supply more than 72% of generation by 2035.
Australia’s power mix is projected to change quickly. GlobalData sees total installed capacity growing 6.2% yearly from 2025 to 2035, with renewables rising from slightly above half of capacity to almost four-fifths. By 2035, it expects renewable sources to provide over 72% of generation, while the national goal is 82% renewable electricity in 2030.
To support that shift, the Capacity Investment Scheme was enlarged from 32 GW to 40 GW in July 2025. It now seeks 26 GW more renewable generation and 14 GW of clean dispatchable capacity by 2030. Tender 7 chose 19 projects totaling 7.8 GW, including eight battery projects with over 2 GW/7.9 GWh storage.
The pace of coal retirement and replacement may affect households and businesses reliant on stable electricity, especially in New South Wales, where Eraring’s extension is intended to reduce supply risk. Workers and communities tied to coal could face uncertainty if closures proceed, while renewable, battery and transmission projects may create new construction and operational roles. Electricity costs and reliability could vary as infrastructure and storage are commissioned.