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No looking back: Energy Transition in Australia and New Zealand

Australia's Victorian Big Battery project is slated for expansion. Image Courtesy: Victoria Big Battery

In many ways, this year was the tipping point for renewable energy. The world has woken up to the imperative of energy transition, and countries around the world have made progress on this front, albeit in different degrees. We take stock of their situation in this multi-part series.  


Energy Storage

Australia's energy storage development is spearheaded by ARENA, the Australian Renewable Energy Agency. According to the Clean Energy Council (CEC), the country's national trade association, Australia had nearly 2 Gwh of large-scale battery energy storage systems (BESS) under construction at the end of 2022, almost twice the year-before.

The country had 19 BESS projects under development with a total storage of 1,380 MW output and 2,004 MWh energy capacity. CEC estimates the country installed around 50,000 residential battery systems in 2022, up from an estimated 35,000 installations in 2021.

But it's a long way from meeting the continent's requirements. In March 2023, the country's national science group, the Commonwealth Scientific and Industrial Research Organization, published a roadmap for renewable energy storage which said the country would need a 10-14x increase in energy storage capacity between 2025 and 2030.

In July 2023, consultancy firm Wood Mackenzie said Australia led the global market for BESS, with announced projects exceeding 40 GW. The country made more than $1.3 billion of financial commitments to large-scale BESS projects and hybrid (renewable energy + storage) in the second quarter of this year.

Mordor Intelligence estimates Australia's energy storage systems market will touch $8.65 billion by the end of 2023 and see a compounded annual growth (CAGR) of 27.5 percent till 2028.

Australia has also been actively repurposing decommissioned power plants to battery storage stations. Some key examples are:

  • In March, utility company Origin Energy announced it would replace the 2,880 MW Eraring Power Station with a combination of new energy resources after the station closed in 2025.
  • In June, the country repurposed the former Hazelwood Power Station in the Latrobe Valley, Victoria, to commission a 150 MW/ 150 MWh Hazelwood BESS
  • In July, Western Australia utility Synergy begun construction of Kwinana BESS 2 in Perth. The project is located at the site of the former Kwinana Power Station will have capacity of 200 MW/ 800 MWh. It is scheduled for completion towards end of 2024
  • In August, Australia's second largest battery storage facility began commercial operations. Project owner AGL and system integrator Wärtsilä onboarded the 250 MW, 250 MWh (1 hour duration) BESS on Torrens Island in South Australia

Top 5 ES projects in Australia

1. Gympie Regional Energy Hub Stage 2

The Gympie Regional Energy Hub Stage 2 is a 1,000 MW BESS project in Gympie, Queensland, using lithium-ion batteries. Owned and developed by SolarQ, the project was announced in 2017 and will be commissioned in 2025.

2. Goyder South Project

The Goyder South Project is a 900 MW lithium-ion battery ES project in Burra, South Australia. The project was announced in 2019 and will be commissioned in 2025. It is owned and developed by Neoen Australia.

3. Kentbruck Green Power Hub

The Kentbruck Green Power Hub is a 500 MW lithium-ion battery energy storage project in Nelson, Victoria, fed by 118 wind turbines. The project, owned and developed by Neoen Australia, was announced in 2019.

4. Bonshaw Solar PV Park

The Bonshaw Solar PV Park is a 300 MW energy storage project in Inverell Shire, New South Wales, using lithium-ion batteries. It was announced in 2020 and will be commissioned in 2024 by Gaia Australia.

5. Victorian Big Battery ESS

The Victorian Big Battery Energy Storage System, owned by Neoen, is a 300 MW grid-scale lithium-ion battery energy storage project located in Geelong, Victoria. It stores enough energy to power over one million homes for half an hour. A proposal to expand the project with Victorian Big Battery 2 is under process.


Australia's e-mobility market is on a roll. The country bought more EVs in the first six months of 2023 than it purchased in all of 2022, data revealed.

Total sales for January-June touched 46,624, taking the number of EVs in the country to around 130,000. Battery EVs account for 109,000 of that number, with the balance 21,000 being hybrids. In all, EVs accounted for just under nine percent of the country's new car sales during the first half, according to estimates from the country's Electric Vehicle Council.

Analysts estimate the country's EV sales will rise to 98,000 vehicles per annum by 2028. Financially, the EV market is estimated to touch $2.85 billion in 2023, before rising to $6.25 billion by 2028.

Region wise, EV sales were strongest in the Australian Capital Territory, at 22 percent of new cars, followed by New South Wales and Tasmania at nine percent each. Victoria followed closely behind at 8.5 percent, with Queensland (7.7 percent) and Western Australia (7.5 percent) coming thereafter. South Australia with 6.5 percent share and the Northern Territory with 2.5 percent brought up the rear.

Australia has 91 different electric cars, vans and pickup trucks on sale, but most have limited supply. Tesla's Model Y and Model 3, and the BYD Atto 3 account for more than 68 percent of EV sales.

Experts say EV demand is likely at least double actual sales, with consumers often unable to get their vehicle due to shortages or opting for a regular vehicle because of the longer wait for EVs. In one instance, Australians ordered 30,000 vehicles of a Hyundai EV model, but the company could only send the continent 700 units.

Green Hydrogen

Australia is currently reviewing its National Hydrogen Strategy. The review began in February and closed in August. The country was the third nation in the world to publish a hydrogen strategy, which was released in 2019, and has up to $300 billion of potential hydrogen investments in the pipeline, among the largest in the world.

Australia plans to use hydrogen as an important contributor towards its Net Zero transition through deployment in areas such as industry, transport, grid firming, chemicals and metals production.

The country also wants to position itself as a global hydrogen leader by 2030, with plans to export over three million metric tons each year by 2040, which is estimated to add up to $10 billion a year to the country's economy.

The Australian Renewable Energy Agency (ARENA) has provided more than $150 million to 43 renewable hydrogen projects covering areas such as hydrogen refueling and hydrogen trucks, hydrogen for producing green ammonia, hydrogen for use in alumina refining, gas blending and remote power. 

Some key news to emerge from Australia on the hydrogen front this year:

  • In March, the Japanese government awarded $1.6 million to an Australian-Japanese venture developing hydrogen from brown coal mined in AGL Australia's Latrobe Valley
  • In May, Australia signed the Terms of Reference of an India-Australia Hydrogen Task Force, which will advise on opportunities to accelerate manufacture and deployment of clean hydrogen
  • Also in May, the country announced a $1.4 billion Hydrogen Headstart fund that will allow states to subsidize hydrogen projects and bridge the initial funding gap faced by new hydrogen startups
  • In June, the country approved plans for a $34 million renewable hydrogen plant in Victoria state
  • In August, the state of Western Australia received plans for two new green hydrogen projects: Denham and East Kimberley 

Here's a map of Australia's hydrogen capacities and their status.

To see other articles in this series, click here.



Energy Storage

New Zealand already has a low emissions electricity system, with significant production from both hydropower and geothermal sources. The International Energy Agency says that as of 2021, the country generates 80 percent of its electricity from renewable sources.

However, the country does not yet have a long-term energy strategy, and only plans to release one towards the end of 2024.

New Zealand plans to generate 90 percent of its power from renewable sources by 2025, rising to 100 percent by the end of the decade. The government plans to promote the electrification of sectors such as buildings, transport and industry.

In 2020, the country launched the NZ Battery Project to advice on the technical, environmental and commercial feasibility of potential energy storage projects, including the Lake Onslow pumped hydro project.

In January this year, France's Saft bagged a contract to construct New Zealand's first large-scale grid-connected BESS. The 100 MW project is located at Ruakākā in the country's North Island. The BESS will be co-located with a 130 MW solar farm.


New Zealand is promoting EV adoption rates through its Clean Car Discount scheme, which provides rebates to buyers of lower CO2-emitting vehicles while levying a fee on conventional vehicles. Data shows that passenger EV sales jumped 150 percent in 2022 (over 2021) to about 23,000 units, with batter EVs accounting for just under seven out of 10 sales.

Consulting company BMI forecasts EV sales will increase 26 percent this year to 29,000 units, with the possibility of a greater increase because of the arrival of new models from Chinese brands such as BYD, whose vehicles are more affordable than cars from Western European and US manufacturers.

According to data published by New Zealand's Motor Industry Association, the leading battery EV brands in the country are Tesla, Hyundai and MG, while leading sellers of plug-in hybrid EVs include Mitsubishi, MG and BMW.

Green Hydrogen

New Zealand is currently developing a hydrogen roadmap that will be used to finalize the country's Energy Strategy, to be released at the end of next year. Updates from the responsible ministry's website indicate authorities are currently carrying out targeted engagement on their initial approach, including key objectives and priorities.

GNS Science, a local company, is conducting research into methods of developing green hydrogen through electrolysis that does not depend on high-cost materials such as platinum and iridium. 

To see other articles in this series, click here

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