Queensland’s Energy Backflip - but the Environment is Still a Smart Long-Term Bet
Investors eyeing Queensland’s energy transition have had a bumpy few weeks. A new government, exploding infrastructure, and a clean sweep of senior energy executives have turned what should have been a steady march toward renewables into a display of political improvisation. But despite the chaos, one thing remains clear: investing in the environment still makes long-term financial sense.
So what happened?
The recently elected LNP government in Queensland has announced a sweeping overhaul of the state’s energy policy (1). Gone are the legislated targets for emissions reductions—75% by 2035—and the ambitious renewables targets of 50% by 2030 and 80% by 2035. In their place is a new five-year plan that places coal and gas back at the centre of the grid. Wind, solar and storage barely rate a mention.
The centrepiece of the plan is the extension of the ageing Callide B coal-fired power station. Originally scheduled for retirement in 2028, Callide B will now stay online until at least 2031. This decision follows a series of costly incidents at its sister plant, Callide C, including a new explosion just last month. Despite this, the government argues the extension is necessary for grid reliability and economic stability. (2)
The cost of this ideological pivot is already adding up. Refurbishing Callide B is tipped to cost around $400m a year. A Queensland Conservation Council report estimates that keeping it open beyond 2028 could cost taxpayers up to $420m. That’s before factoring in the indirect effects: price volatility, unreliable supply, and long-term emissions liability.
What was the political fallout?
Two top executives at CS Energy, including CEO Darren Busine, were shown the door immediately after the government made its Callide announcement. Busine had already resigned and was scheduled to leave in May, but was hastily removed, along with the general manager of Callide, Mick Hill. Busine’s tenure had been marked by a clear pivot to renewables, energy storage, and gas peaking—strategies clearly out of favour with the new administration. (3)
The optics were brutal. Executives who had been building a forward-looking energy portfolio were dismissed as the government forced a return to a 1980s playbook. Industry observers have rightly called it farcical. More seriously, it sends a troubling message to private capital: that political interference may override commercial and operational logic in Queensland’s energy system.
The stated reason for these changes? Cost blowouts and risk management. The government blamed the previous administration for what Treasurer and Energy Minister David Janetzki at a Queensland Energy Club called it “fiscal vandalism.” Projects like the Copperstring transmission line and Borumba pumped hydro are indeed facing rising costs. But let’s not kid ourselves—budget overruns are not unique to clean energy. Nor are they a reason to walk away from the inevitable structural shift in energy.
Large infrastructure projects regularly face cost escalations, particularly in high-inflation environments. The solution isn’t to shelve the projects, but to improve their governance, oversight, and risk assessment. Transferring Queensland Hydro to the Queensland Investment Corporation may help in that regard, and so might refocusing pumped hydro investment on more manageable projects like Mt Rawdon.
But let’s be clear: the environment is not to blame for these budget issues.
The Global Energy transition continues
The global energy transition is not optional. Nor is it driven by ideology. It is being powered by market forces: falling costs for wind and solar, rising volatility in fossil fuel markets, and the decarbonisation demands of institutional investors and global supply chains. Even Rio Tinto, hardly a poster child for green activism, has made clear that its Gladstone smelters will only remain viable with cheaper and cleaner power. That power doesn’t come from coal.
On a capacity factor of just 53–56%, Callide B is one of the least efficient generators in the country. It is offline for the equivalent of 12 weeks per year, cannot ramp quickly to balance solar penetration, and contributes disproportionately to Queensland’s emissions and power price spikes. AEMO has repeatedly warned that unplanned outages from ageing coal assets are the greatest risk to grid reliability. And investors know that volatility equals cost.
By contrast, renewables—backed by firming and transmission—offer predictable costs, long-term offtake certainty, and increasingly, strategic geopolitical alignment. From an investment perspective, these projects provide scale, future relevance, and the kind of long-duration returns infrastructure portfolios seek.
What’s more, the political narrative is not as settled as it seems. Queensland's emissions reduction targets were passed with bipartisan support just last year. The Clean Economy Jobs Bill and the Renewable Transformation Act weren’t fringe policy—they were backed by legislation and investor sentiment. While the LNP may pause or dilute these targets, they are unlikely to eliminate the economic case underpinning the transition.
If anything, these reversals highlight the need for investors to stay disciplined. Environmental investing isn’t about chasing short-term popularity—it’s about anticipating where capital is headed, and aligning with projects that will survive the next five, ten, or twenty years of policy churn.
Investors should also note that political cycles are short, but project timelines are long. Queensland’s roadmap will evolve again. Markets are watching. And so are consumers, who increasingly prefer lower-cost, zero-emissions power, regardless of what’s happening in cabinet.
The Bottom Line
Budget blowouts are real—but abandoning renewables in favour of ageing, unreliable coal infrastructure is not a solution, it’s a step backward. Investors should not confuse political theatre for structural change. The long-term investment case for clean energy remains sound: it's cheaper, more scalable, and aligned with both environmental necessity and economic logic. Queensland’s recent policy shift may delay, but it won’t derail the direction of capital. Stay the course.
References
1 Queensland Government, “Energy Roadmap to deliver affordable, reliable and sustainable energy.” 8 April 2025, https://statements.qld.gov.au/statements/102355
2. RenewEconomy, Sophie Vorrath & Giles Parkinson ““Fiscal vandalism:” Queensland doubles down on coal and gas after transmission, hydro cost blowouts” 8 April 2025. https://reneweconomy.com.au/fiscal-vandalism-queensland-doubles-down-on-coal-and-gas-after-transmission-hydro-cost-blowouts/
3. RenewEconomy, Giles Parkinson “Heads roll at Callide and CS Energy as LNP coal plant extension explodes into high farce” 15 April 2025. https://reneweconomy.com.au/heads-roll-at-callide-and-cs-energy-as-lnp-coal-plant-extension-explodes-into-high-farce/
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