Issue 257, September 2026
As a trade magazine commentator wrote in mid-August, “Criticism comes easily—fixes don’t.” Almost every day of the present era brings more criticism, mostly of the federal government’s management of energy supply and management, and frequently argument and advice about how to address transition problems on the path to net zero (of which there are not a few). The debate is compounded by State-by-State issues and, particularly in Victoria, growing concern about the impact of years of pursuit of contentious management. The next UN climate change conference (CoP31 in Turkey in November) will compound the Australian debate because of the role leading negotiations of Climate & Energy Minister Chris Bowen and the holding next month of a pre-CoP meeting he is setting up in Fiji. And then there is the ever-growing issue of data centres and how to serve their energy needs.
“Taxpayers are being forced to pledge more than $8.1 billion since the beginning of 2025 to keep vital companies alive as Labor’s energy policies plague businesses with crippling power prices” — Aidan Morrison, Centre for Independent Studies energy director. “Instead of acknowledging that the renewable energy roll-out has failed to deliver lower prices as promised, the government is doubling down on the subsidy option.”
“The Climate Change and Energy Minister is extra proud of both the solar rooftop subsidy and the enormous rescue package handed to the Tomago Aluminium mill. Instead of patting himself on the back, he should be ashamed that Australia’s energy grid has become so expensive that one of our critical industries has to go begging for public money” — Alexandra Marshall, Spectator Australia magazine.
“There are few people left who think the federal government will hit its target of 82 per cent renewable power by 2030” — Ryan Cropp, Australian Financial Review energy and climate reporter. “The goal set in 2022 has been in serious doubt for at least a year, held back by a whole range of factors, not all of which are in Chris Bowen’s control.”
“Missing the target will be disappointing but it will not be armageddon” — Chris Bowen. “If we got to 82 per cent in 2031, is that a major national catastrophe? No. Are we still trying to get there in 2030? Sure.”
“In 2022, Bowen promised to reduce greenhouse gas emissions by 130 million tonnes to meet the legislated target of a 43 per cent reduction on 2005 emissions by 2030” — Nick Cater, Menzies Research Centre. “The annual Department of Energy carbon accounts released just before Christmas showed an actual reduction of just 29 million tonnes in the previous four years.That’s a reduction of roughly 600,000 tonnes a month on Bowen’s watch, roughly the same rate as the fall in emissions from 2012 to 2022, a period Bowen likes to call a decade of denial and delay.”
“Bowen’s focus has shifted to managing expectations away from the impossible job of meeting his goals” — Cater.
The Australia Energy Market Operator, in a new review, is sounding a warning that electricity demand from data centres by the middle of the next decade could be seven times current levels.
AEMO says that, if this eventuates, the centres’ share of NEM operational demand could quadruple from its present three per cent to 13 per cent, with total consumption at 34 terawatt hours compared with five TWh at present.
There are currently 225 data centre projections under consideration for the NEM but the market operator points out that there is “significant uncertainty” about how many of them will be developed. It adds: ”More than 40 per cent of projects in 2025 have either dropped out or regressed their connection status.”
The issue of what forms of generation should be pursued for the data centre program found its way on to the agenda of the “national cabinet” meeting of governments in Sydney in the last week of August. In the face of federal government pressure for use of renewables, both Queensland the Northern Territory governments emerged from the meeting claiming they had “wins” and will be free to make their own choices. There will be a further government leaders’ meeting to discuss the issue before the end of the year.
However, South Australian Premier Peter Malinauskas asserted after the meeting that “renewables will principally be the form of energy that will power data centres in the future in Australia.”
Associate Professor Ehsan Noroozinejad of Western Sydney University in a commentary on the issue after the leaders’ meeting wrote in The Conversation that “both in Australia and overseas local communities are increasingly worried about the potential risks of a rapid data centre rollout” — pointing to concerns about strained water supplies, noise levels and competition for land with housing. “Higher power bills” are another concern, given, how much energy data centres consume.”
The latest report on electricity developments by the Australian Energy Market Operator, published in August, cautions that more investment on enabling NEM supply reliability is essential in pursuing the federal government’s energy transition and frets that a number of projects are “likely to run late.”
The so-called statement of opportunities, presented annually, declares the reliability outlook for the east coast market has improved over the past 12 months thanks to “record levels of new generation and storage “ and it anticipates “a strong pipeline of projects” over the next decade.
“Beyond 2030,” it declares, “the next wave of investment will be critical to maintaining reliability.”
It says that this is “highly dependent on timely delivery, operational availability and the ability of resources to sustain supply during extended periods of system stress.”
The report records that a record 9.1 gigawatts of new energy generation and storage reached full output in 2025/2026 – twice as much as the previous year — while another 40 gigawatts of renewable generation and battery storage developments were in planning stages and 33 gigawatts of energy projects received government investment approval.
The new statement throws focus on Victoria’s situation. It comments that “Victoria could struggle to meet demand as early as 2030-31 if only currently committed projects go ahead; that timeline pushes out to 2033-34 only if government-backed projects also proceed.”
Commenting on the publication, the Australian Energy Council lobby group says in a statement that “this is an important reminder that the transition is not just about what is planned, but what is actually delivered — reliability depends on generation, storage, transmission, and demand-side resources arriving when they are needed.”
Now here’s a quote encapsulating our energy environment: “Energy policy is no longer just about emissions and household bills. It is increasingly about economic competitiveness, sovereign capability, national security and the infrastructure demands of a rapidly evolving digital economy. Data centres, critical minerals, advanced manufacturing and the global race for AI dominance are reshaping how we think about energy, and Australia cannot afford to fall behind.”
This is from The Australian newspaper, promoting a conference it is holding in Sydney in late September — and it is a keeper for thinking about where we are in pursuing a viable energy scene for the years ahead.
It’s not as succinct as Bill Clinton’s famous self-reminder — “It’s the economy, stupid” — but it’s directionally apt in our local current situation.
Where we are has been well-parsed by Gary Banks, a former Productivity Commission chairman, in a commentary published by the Australian Financial Review.
He writes: “In the bad old days of industrial relations, the toll taken on business productivity and competitiveness was partially offset by access to the world’s cheapest and most reliable energy. That, unfortunately, is no longer the case. This flies in the face of repeated assertions that the transition to net zero is driving productivity and securing more affordable, reliable and resilient energy.”
Banks also declares: “Coal generation has been the mainstay of a sophisticated, available-on-demand electricity system that has evolved over decades. In forcing its premature demise by subsidising renewables, the question of how to avoid damaging the economy in the process appears not to have been thought through.
“The ensuing problems have been exacerbated by unduly ambitious emissions targets and regulatory impediments to developing gas, regarded by industry experts as an essential complement to intermittent, non-synchronous energy sources. Energy costs rising above the OECD average have undercut the competitiveness of Australian industry.”
And he is pessimistic about where we are heading: “So what are the odds of achieving real reform in place of the performative variety that I fear we are becoming inured to? Given the current interplay of ideology, interests and political personalities, the odds of anything much happening in the foreseeable future are not great.”
To which Nick Cater of the Menzies Research Centre, in another newspaper commentary, adds: “The goal of carbon-neutrality by the middle of the century cannot be met, but much damage can be done by trying.”
Veteran resources journalist Angela Macdonald-Smith, in a commentary for the Financial Review’s subscriber newsletter at the close of August, reports that “there are plenty in the industry viewing with more than a degree of scepticism the assurances from Energy Minister Chris Bowen that everything is A-OK with the clean energy rollout,” quoting one senior east coast industry executive saying “you can drive a bus through their assumptions.”
Meanwhile Robert Gottliebsen, one of the icons of Australia’s economic and business media, is yet again pointing to the dangers of major problems in progressing the Snowy 2.0 project. Posing the question that it may not be possible to complete the project any time soon, Gottliebsen argues there are three clear implications:
1. Coal-driven power stations will need to be used for at least another decade or two.
2. Additional gas-fired power stations will be required.
3. We will need to again look at nuclear, and that becomes possible because of a remarkable breakthrough in Australian technology that has developed a nuclear power station that can fit in the back of a ute.
Discussing the data centre dilemma now confronting us, he opines: “before we begin setting rules for renewable power, we need to get gas and/or nuclear organised quickly for consumers.”
In the face of all this, it is interesting to see the federal energy minister trying to shape-shift his messages to the electorate.
Talking to the media in late August about the government’s goal of having 82 per cent electricity supply from renewables by 2030 — that is, now in less than four years — Chris Bowen provided this fudge: “You’re going to get some swings and roundabouts on 82 per cent. I’m confident that we can reach the target, but we’re going to have to keep our foot on the accelerator and keep doing things. It’s not inevitable. If we got to 82 in 2031, is that a major national catastrophe? No. Are we still trying to get there in 2030? Sure.The closer we get to it, the better the country will be.”
Hmmm.
Keith Orchison
2 September 2026