Lyla Lindsey
Energy Australia is an energy provider for more than 1.6 million Australian customers. In 2021, Australia was a net energy exporter and one of the largest exporters of liquefied natural gas (LNG), coal, and minerals. In the same year, Australia was the world's fifth-largest hard coal producer. Coal remains an important part of Australia's energy sector, representing 64% of domestic energy production. However, there has been a recent shift towards renewable energy, with renewable energy sources accounting for 39.4% of the total amount of electricity generated in Australia in 2022. Australia has set climate goals to double emissions reductions by 2030 and reach Net Zero emissions by 2050, with a clean electricity target of 82% renewable energy by 2030.
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What You'll Learn
Coal exports and production
Australia exports a significant proportion of its coal production, capitalising on its abundant coal resources and strong demand from Asia. In 2020-21, Australia exported 10,324 PJ of coal and coal products, accounting for about 56% of the country's total energy exports. Coal export volumes have grown at an average annual rate of 2.5%, from 302 Mt in 2011-12 to 363 Mt in 2020-21. However, in 2021-22, Australian coal production faced constraints, leading to a decrease in exports.
Australia is the world's largest exporter of metallurgical coal and the second-largest exporter of thermal coal. In 2022-23, around 89% of black coal energy production was exported, along with 73% of domestic natural gas production and 97% of crude oil production. The high export rates of coal and other fossil fuels contribute to Australia's status as a substantial net energy exporter.
Coal is widely used in power generation and heavy industry due to its availability, low cost, and role in industrial processes such as steelmaking. However, burning coal produces large amounts of CO2 and other pollutants, making its phase-out essential to meet net-zero emissions targets. Australia's coal exports are primarily shipped to Japan, South Korea, Taiwan, India, and other destinations, with exports to China on hold in 2021-22.
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Oil imports and consumption
Australia's oil production peaked in 2000, after increasing gradually since 1980. Net oil imports rose from 7% of total consumption in 2000 to 39% in 2006. In 2016, Australia imported 8% of its oil consumption, or 86,930 barrels per day. By 2021, oil made up 52% of the Total Final Consumption (TFC) and 32% of the Total Energy Supply (TES). It contributed to 4% of domestic energy production and 1.8% of electricity generation. Oil consumption in 2020 was 892.3 thousand barrels per day (kb/d), with domestic transport consuming 65.4% of this amount.
Australia's oil imports come from more than 17 countries, mainly in Asia (40%), Africa (18%), and the Middle East (17%). At the same time, Australia exports 75% of its crude oil production, with Indonesia and Singapore being the largest recipients. In 2021, Australia was a net energy exporter and one of the largest exporters of liquefied natural gas (LNG), coal, and minerals.
Australia's fuel security is precarious, as the country relies heavily on oil shipments from some of the world's most contested regions. The closure of Australia's refineries means that the country is on track to be 100% reliant on imported petroleum by 2030. Australia's fuel ports, such as the primary fuel port in South Australia at Port Adelaide, are particularly vulnerable to disruptions.
Australia holds 1,193,000,000 barrels of proven oil reserves as of 2016, ranking 38th in the world. Australia's proven reserves are equivalent to 2.9 times its annual consumption levels, which means that without imports, there would be about three years of oil left at current consumption levels.
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Climate goals and emissions reduction
Australia has raised its climate targets and is now accelerating its transition to clean energy. The country has committed to the global goal of preventing a rise in global average temperatures by limiting warming to 1.5 °C to 2 °C.
The Australian government's Powering Australia plan aims to reduce emissions by 43% by 2030 and achieve net-zero emissions by 2050. This involves boosting renewable energy sources, such as solar and wind power, and transitioning away from fossil fuels. In 2022, renewable energy accounted for 39.4% of Australia's total electricity generation. To achieve its targets, Australia needs to improve energy efficiency, increase investment in clean energy, and address its high reliance on fossil fuels.
The energy sector needs to enhance its resilience to climate change impacts, such as disruptive storms, flooding, wildfires, and heat waves. Australia has yet to complete a comprehensive assessment of climate change impacts on the energy sector beyond electricity. A national-level energy sector plan is necessary to outline future steps for climate resilience.
Australia is well-positioned to benefit from the global economic shift towards clean energy and new technologies. It plays a key role in providing critical minerals and new technologies for clean energy transitions globally. Australia's Hydrogen Energy Supply Chain (HESC) project, for example, involves producing and transporting liquified hydrogen, with the first shipment sent to Japan in 2022.
The transition to net-zero emissions will require innovation and investment across all sectors. The Australian government is committed to seizing these opportunities and making the country a renewable energy superpower. The Climate Change Authority (CCA) will provide independent advice to the government, ensuring that the Net Zero Plan and 2035 targets are based on the best available information.
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Energy supply and demand
Coal has long been a critical component of Australia's energy sector, but its dominance is gradually declining. In 2021, coal accounted for 64% of domestic energy production, 32% of the Total Energy Supply (TES), and 53% of electricity generation. Between 2010 and 2020, coal's share in energy production decreased from 76% to 65%, and its role in TES and electricity generation also dropped.
Natural gas is another significant energy source in Australia. In 2021, it made up 29% of the country's energy production, 28% of TES, 19% of electricity generation, and 17% of Total Final Consumption (TFC). The highest usage of natural gas was in electricity and heat generation (33.9%), followed by the industrial sector (23.3%).
Oil, while less prominent than in previous years, still plays a role in Australia's energy mix. In 2021, oil accounted for 52% of TFC and 32% of TES, contributing to 4% of domestic energy production and only 1.8% of electricity generation. Oil consumption in 2020 totalled 892.3 thousand barrels per day, with domestic transport being the largest consumer at 65.4%.
Renewable energy sources, such as solar and wind power, are gaining traction in Australia. In 2022, renewable energy accounted for 39.4% of the total electricity generated in the country. This shift towards renewables is driven by the increasing awareness of global warming and human-induced climate change, with Australia taking steps to reduce its carbon footprint and transition to low-carbon energy sources.
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Renewable energy sources
EnergyAustralia is a large energy company that provides government-accredited GreenPower energy. Customers can choose a percentage of their electricity usage (10%, 20%, or 100%) to be sourced from renewable energy generators, which include solar, wind, hydro, and biomass. EnergyAustralia jointly owns the Cathedral Rocks wind farm in South Australia, which has 33 wind turbines with a generation capacity of 66MW. The company also has rights to more than 500 megawatts of electricity generated by wind farms in New South Wales, Victoria, and South Australia, underpinning 12% of large-scale wind projects in the National Electricity Market.
In addition to wind energy, EnergyAustralia is exploring other renewable energy projects. For example, they are working on a pumped hydro storage project in the Spencer Gulf of South Australia, which could produce 225 MW of electricity with eight hours of storage. EnergyAustralia is also developing a project to augment the 1400-MW Mt Piper power station in New South Wales with lower emissions generation, potentially providing reliable power for 40,000 homes.
The transition to renewable energy sources is a significant focus in Australia, with the country aiming to reduce emissions and address the impacts of climate change. In 2012, the Australian government implemented a carbon price to encourage investment in renewable energy sources, and states have also introduced feed-in tariffs to support residential-scale renewable energy infrastructure. As a result of these initiatives, renewable energy accounted for 39.4% of Australia's total electricity generation in 2022.
Australia has abundant natural resources for renewable energy production, including solar and wind power. In 2010, the ZCA "Stationary Energy Plan" outlined a strategy for Australia to transition entirely to renewable energy within a decade, primarily through large-scale solar power plants and wind turbines. While this plan was not adopted, it demonstrates the potential for renewable energy development in Australia.
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Frequently asked questions
Energy Australia is the energy provider for more than 1.6 million Australian customers.
The lowest possible price is $1,593 (incl. GST) for an average home using 3,900 kWh per year on a flat tariff in the Ausgrid network area.
Established under the 2022 Climate Change Act, Australia's climate goals include doubling emissions reductions by 2030 and reaching Net Zero emissions by 2050.
