Renewable Energy Makes up More of the Mix.
There’s a reason investors are increasingly turning to the environment as a central thesis.
If you were still waiting for a signal we understand. But the first quarter of 2025 delivered our thesis in spades. According to the Australian Energy Market Operator’s (AEMO) latest data, renewables are not just part of the power mix — they’re reshaping it. And it’s growing. More importantly, the environmental transition is now squarely in the sights of the Albanese government, and Labor’s recent election win cements that mandate for the years ahead.
A Record-Breaking Quarter for Clean Energy
Between January and March 2025, renewable energy accounted for 43% of electricity used across the National Electricity Market (NEM) — up from 39% the year before. (1) Rooftop solar jumped 16%, grid-scale solar rose 10%, wind increased 18%, and battery output surged 86%, hitting all-time highs across the board250508 From AEMO take u…. These figures weren’t driven by sentiment — they were powered by physics, sun, and wind, and amplified by infrastructure that’s increasingly delivering when it matters most.
Even with growing electricity demand—driven largely by hotter conditions in Victoria and South Australia — emissions fell 5.1% compared to the same quarter last year. (2) Coal-fired generation hit new Q1 lows. Gas-fired generation also dropped.
Power Dynamics Are Changing
Battery storage is quickly becoming a market-making force. With several major installations now online, batteries earned most of their revenue not from frequency services, but from price arbitrage: soaking up solar in the day and selling it back in the evening. That’s not just good business—it’s an essential part of a stable grid, and a necessary shift in a market where renewables are increasingly setting the price.
Indeed, prices set by coal and hydro have risen—coal now averages $84/MWh and hydro $123/MWh—but the share of intervals set by cheaper wind and solar rose from 10% last year to 15% in Q1 2025. As a result, wholesale electricity prices across the mainland actually fell 2.5% compared to the final quarter of 2024. And in some regions, negative or zero prices now occur 18% of the time.
In short, clean energy is not just affordable — it’s beginning to define affordability.
Labor's Win Locks in Direction
What makes these trends even more compelling from an investment standpoint is the political overlay. The Albanese government’s election win didn’t just secure another term—it solidified a climate and energy platform built on scale and speed. The BHAG (big hairy audacious goa)l is to reach 82% renewables by 2030. To get there, it is reported that Labor is underwriting 23 gigawatts of new wind and solar, along with 9 gigawatts of storage, through its expanded Capacity Investment Scheme.
These are not aspirational targets. They are legally backed, taxpayer-underwritten infrastructure commitments. Auctions are being held every six months, and fossil fuel projects are explicitly excluded. For investors, that provides rare certainty: if you’re backing clean energy, the government has your back.
Western Australia Echoes the Trend
On the other side of the country, Western Australia is following suit. The state’s Wholesale Electricity Market (WEM) recorded its highest-ever Q1 renewable contribution at 41.6%. Rooftop solar now supplies more than 20% of the state’s energy. Batteries delivered a 261% increase in output. Emissions intensity fell 5.7% year-on-year. This, despite the fact that total demand hit a new peak on 20 January, as overnight temperatures soared.
The transition is no longer confined to Australia’s east coast or federal policy. It’s embedded in state markets, consumer rooftops, and industrial supply chains. The environment is not just a regulatory issue. It’s an energy solution.
Not Without Challenges—but the Direction Is Clear
That’s not to say the road ahead is frictionless. The Guardian notes that while growth has resumed, more acceleration is needed to reach Labor’s 2030 target. Transmission remains the key bottleneck. Without it, solar and wind farms will be built more slowly, or worse, stranded altogether.
But the government knows this. The $20bn Rewiring the Nation plan is already underwriting grid expansion. The market knows it too. The recent uptick in large-scale project activity suggests that, after a brief lull in 2023, confidence is returning.
As Nexa Advisory’s Stephanie Bashir points out, the system is benefiting from renewables already: lower prices, reduced emissions, and improved grid reliability. Investors are increasingly acting on those signals.
The Bottom Line
We are now past the tipping point where investing in the environment is just a hedge or a values-based play. It is, unequivocally, a growth strategy. The technology is working. The economics are stacking up. And with Labor’s election win, the policy momentum is locked in for another term.
Rooftop solar, wind, batteries, and grid-scale renewables aren’t just winning—they’re setting records. Emissions are falling. Prices are stabilising. Reliability is improving. And the long-term structural transition to a clean energy economy is accelerating again.
For investors with an eye on the future, the message is clear: the environment is proving itself today.
References
Adam Morton, The Guardian Australia “More than 40% of electricity used in Australia’s main power grid at start of year was renewable” 07 May 2025 https://www.theguardian.com/australia-news/2025/may/07/more-than-40-of-electricity-used-in-australias-main-power-grid-at-start-of-year-was-renewable
Australian Energy Market Operator Quarterly Energy Dynamics Q1 2025, 07 May 2025 https://aemo.com.au/newsroom/media-release/growing-renewable-capacity-in-nem-drives-fresh-records-as-coal-availability-declines
Important Information
EnviroInvest Pty Ltd ACN 685 107 957 (“EnviroInvest”) is an Authorised Representative of Daylight Financial Group Pty Ltd ACN 633 984 773 (“DFGPL”) which is the holder of an Australian Financial Services Licence (AFS Licence No. 521404).
Information in this commentary is current as at date prepared unless otherwise stated. However, please bear in mind that investments can go up or down in value, and that past performance is not a reliable indicator of future performance. For more Important Information please refer to the Disclaimer section of this website.
This communication may contain general financial product advice. It has been prepared without taking into account your personal circumstances, and you should therefore consider its appropriateness in light of your objectives, financial circumstances and needs before acting on it.
If our advice relates to the acquisition or possible acquisition of a particular financial product, you should obtain a copy of and consider the Product Disclosure Statement (PDS) before making any decision.