Issue 259 November 2026
The year now nearing its end has demonstrated yet again that Australia’s energy policy is in continuous change mode, throwing up substantial issues of concern while also delivering openings for investors and promoters of the “transition” to talk up developments. An opportunity to gauge what voters are thinking ahead of the 2028 federal election is at hand in the shape of Victorians going to the polls in November in a State where almost every aspect of the impact of power supply developments on the community is a matter of concern and controversy.
“Don’t let a sweet spot fool you that Australia’s electricity market is sorted. Political leadership is needed to tackle the nation’s long-term energy challenge” — Chanticleer in the Australian Financial Review. “We’ve done well to get where we are – renewables at more than half the grid across the eastern and southern States and wholesale prices the lowest they’ve been in about five years – but we’re in a sweet spot that cannot last.”
“It’s Snowy 2.0 Groundhog Day and here’s the well-known tune: costs have ballooned. It’s all because of factors beyond our control and, even when that is not the case, it is someone else’s fault” — Bruce Mountain, Victoria Energy Policy Centre.
“Years behind schedule and billions over budget, the Snowy Hydro 2.0 hydro-electricity scheme has transformed from a nation-building ambition to a stark symbol of the nation’s disjointed energy planning and its struggle to build big” — the Australian Financial Review in an editorial on the issue.
“ A cost explosion of about $20 billion hasn’t dampened the government’s tunnel vision for building Australia’s largest renewable energy project” —commentator Michael West.
“The saga of Snowy 2.0 is never-ending” — former MP Jennie George. “Its cost is now estimated at $25 billion, rising to around $45-50 billion with the required transmission links. No longer can its critics be accused of spreading misinformation. Regular warnings about the consequences, costs and liabilities of the project fell on deaf ears.”
“A glaring problem that Snowy Hydro lays bare is that turning big ideas into concrete and steel is vastly harder than politicians pretend,” Sydney Morning Herald writer Emily Kaine. “The construction, which began in 2019, was expected to take six years and cost $2 billion when the Turnbull government launched it, but repeated construction problems pushed back the completion date by several years.”
“Snowy is still under three-quarters complete, bogged down by a combination of shoddy planning, COVID-era supply chain chaos, labour shortages, geological complexity and sheer mismanagement” — Ryan Cropp and Angela Macdonald-Smith in the Australian Financial Review.
“ The situation could have been worse” — Snowy Hydro CEO Dennis Barnes. “This project is incredibly complex, it is off the charts even for mega projects.”
“Completing Snowy 2.0 remains the responsible course … abandoning the project would undermine grid reliability, scrap 5,000 jobs and lead to higher bills” — federal Climate & Energy Minister Chris Bowen.
“Who will pay for it? Australians, through a combination of energy bills and taxes. Given the political incentive to keep bills as low as possible, probably mostly the latter” — Adam Morton in The Guardian newspaper.
“Like the Sydney Harbour Bridge, Snowy 2.0 will still be working a century after the controversy over cost blowouts is forgotten” — professor Andrew Blakers, Australian National University.
Alinta Energy, which was taken over by Singapore’s Sembcorp Industries in December last year for $4.5 billion, has abandoned its plan to develop an 8.2 gigawatt hour pumped hydro project in New South Wales.
In a statement the company says that its Oven Mountain development, which had a budget of $1.8 billion, will not proceed because “economic and timing challenges on key elements of the project, including a critical transmission line, make it unviable.”
The 900MW project, with an 8-hour duration, was planned for the New England renewable energy zone in northern NSW, where it would have used new transmission upgrades to connect to the NEM. The site is near the rural hamlet of Carrai, 60 kilometres south-east of Armidale and 75 kilometres north-west of Kempsey.
The development was given “critical State significance” status by the NSW Coaition government in 2020. The now Coalition opposition declares that the new decision is “a devastating loss for the Macleay Valley, wiping out the prospect of hundreds of jobs and a major boost to the regional economy.”
Record renewable power generation and a surge in grid-scale battery capacity has pushed the main power grid’s gas-powered generation to its lowest for any third quarter since 2000, the Australian Energy Market Operator says in its latest Quarterly Energy Dynamics report.
AEMO says the quarter saw strong growth in renewable and battery storage output. It records a rise in wind generation of 29 per cent, grid-scale solar up 15 per cent and battery discharge nearly tripling to an average of 268 megawatts. The operator adds that the change was supported by 3,796 MW of battery capacity added since late 2024.
Coal-fired generation fell to an all-time quarterly low, down 4.6 per cent year-on-year, while gas-fired generation was cut to its lowest level since Q4 of 2000.
Violette Mouchaileh, AEMO executive general manager policy and corporate affairs, says the latest third quarter outcome “marks a significant milestone for Australia’s energy transition”, declaring: “This is a landmark moment for the NEM. For the first time, renewables and storage supplied more than half of the system’s energy needs for a full quarter.”
Average NEM wholesale electricity prices, a key contributor to retail charges, slumped by 27 per cent year-on-year and 15 per cent from the June quarter to $63 per megawatt-hour, which was the lowest average for a September quarter since 2021.
The Australian Energy Producers lobby group has called on the winners of the Victorian State election to “to reset gas policies to unlock new supply, support investment and protect energy choice.”
AEP says in a commentary on its website that Victoria has enough undeveloped gas resources to meet the State’s demand for at least another 25 years. And it warns: “Without new gas supply, Victorian households and businesses face higher energy costs, greater dependence on interstate and imported gas, and increased risks of gas and electricity shortfalls.”
AEP adds that Victoria's natural gas industry currently supports around 40,000 jobs and contributes $22 billion in annual economic activity. Around four in five Victorian homes are connected to the gas network.
“Recent JWS Research polling found 75 per cent support developing Victoria’s own gas resource while 82 per cent support consumer choice to keep using gas,” it declares.
“Restricting gas connections and appliance choice is at odds with what Victorians want.”
The Clean Energy Council, an industry group representing investors in renewable power, has published a new review of developments providing an upbeat perspective for 2026: “In just six months, more new generation capacity reached financial close than in the whole of 2025. Twelve projects totalling 2.6 gigawatts reached financial close, compared with 2.3 GW across all of last year. More large-scale battery storage was also switched on during the period than in all of 2025. Five new generation projects worth more than $2.8 billion began supplying electricity.”
The CEC says that its report “paints a picture of industry resilience and growth in the face of difficult headwinds” — but it adds: “Looking ahead, confidence appears to be softening, particularly for onshore wind, with investors naming approvals and transmission as their biggest obstacles.”
In a separate report, the lobby group surveys solar issues and records that 180,878 rooftop solar systems were installed during the first half of 2026, a 35 per cent increase on the same period in 2025, and the strongest six-month total since 2021.
It adds: “During the same period, 276,011 home batteries were installed – 52 per cent higher than the prior six months, and progressing at a faster rate than rooftop arrays (153 batteries for every 100 rooftop solar installations).
“On current trends, rooftop solar and consumer battery storage capacity in Australia looks set to exceed the Australian Energy Market Operator’s 2029-30 forecasts by 13 per cent and 79 per cent, respectively.”
It reports that, since January 2019, Australians have installed 21,979 MW of rooftop solar, “eclipsing the combined capacity of the nation’s remaining coal-fired power station fleet.”
The All Energy Australia conference in Melbourne at the end of October asserts that the energy transition is “entering a new phase, with the focus shifting from simply building more renewable generation to ensuring the electricity system can connect, manage and deliver that power reliably.”
It adds that “the grid is at the centre of this challenge,” adding that “the energy system is becoming increasingly decentralised and complex, creating new demands around grid stability, system visibility, digitalisation and the ability to respond to changing patterns of electricity generation and consumption.
This issue of the newsletter devotes a fair chunk of space to comments on the Snowy 2.0 saga — and especially to some of the quotable quotes about it in recent days. But for my money the oddest “grab” — to use journalism jargon — in recent days has come from the federal Energy Minister, Chris Bowen.
He has reportedly told journalists he would “much rather have the cost blowout on Snowy Two, than cough up extra on nuclear” as part of trading blame with Coalition spokesman Angus Taylor on what is now being dubbed Australia’s biggest engineering headache.
There’s much to be said about the project — and plenty of political blame to be shared around for oversight failures over a decade — but playing a nuclear card seems a bridge too far to me.
As it happens, I was trawling Internet coverage of the nuclear issue when the Bowen comment was drawn to my attention and had just read a Lowy Institute opinion essay from earlier this year. In it, Lowy opine: “Australia’s refusal even to permit civilian nuclear development stands out among advanced economies. Removing the prohibition on nuclear power would not commit Australia to building reactors tomorrow. Nor would it diminish the central role of renewables in decarbonising the grid. Australia has extraordinary solar and wind resources and should continue to exploit them.
“A diversified system is more resilient than a monolithic one. Nuclear energy offers reliable base load power, low operational emissions and long-term price stability once capital costs are absorbed. More importantly, it anchors a country within an elite ecosystem of advanced technological capability.
“Strategic maturity means recognising that optionality has value. The ability to develop, regulate and manage nuclear technology confers institutional strength. It reduces the risk of starting from zero should circumstances change. It signals seriousness in an increasingly competitive Indo-Pacific.
“Australia prides itself on realism. Realism, in this context, does not mean alarmism. It does not mean abandoning non-proliferation commitments or embracing militarisation. It means acknowledging that the world is less forgiving and more predatory than it once appeared.
“Energy policy is no longer simply about emissions targets or quarterly power prices. It is about resilience in a turbulent era.
“In geopolitics, states that deliberately narrow their own capabilities rarely fare well.”
Our political leaders still have a mountain to climb to find a workable way of addressing the Snowy issue, but I am blowed if I can see how slagging other forms of electricity production in the context of the “transition” takes the task forward.
In this context an opinion survey published in late October provides an interesting perspective on what Australians think about the nuclear issue.
YouGov research commissioned by Nuclear for Australia has found that 63 per cent of respondents to the survey believe nuclear power should be considered for the supply system while 60 per cent believe it will form part of Australia's future energy mix.
The poll reveals common ground across political lines: 48 per cent of Labor voters and 44 per cent of Greens voters believe nuclear should be considered while 54 per cent of Labor voters expect it to form part of Australia’s future energy mix. This represents a growth in support for the technology over the past 12 months, with a 13 per cent increase in those who believe nuclear will be part of the energy mix.
Keith Orchison
26 October 2026.