Response To The Australian Industry Group’s Report
The Australian Industry Group (Ai Group), through a recent policy document, has delivered a clear message to policymakers: unless we reform our approval processes, coordinate better across jurisdictions, and attract private investment at scale, Australia risks squandering its competitive advantage in clean energy. (1)
In its latest policy pitch “Energy: More, Faster, Cheaper” (1), Ai Group warns that slow approvals, rising project costs and unclear market signals are putting the entire energy transition at risk. And they’re not alone. Over a dozen of Australia’s peak industry bodies have echoed this concern, warning the country will miss its net-zero targets unless the current pace of renewable energy rollout dramatically accelerates.
The numbers are sobering. Australia needs to install more than 160 gigawatts of new solar and wind capacity over the next 25 years to replace ageing coal assets and support electrification. That’s an average of 6.6 GW per year—double our current pace—and as much as 13.6 GW in peak years. (2) And that’s just to meet domestic demand. If we want to tap into booming global demand for green hydrogen, green ammonia and low-carbon metals, the scale is even greater. This is even more worrying given the analysis released by the Australian Market Operator when almost every large solar farm in Australia’s south eastern states will be forced to switch off at least one-third of the power they generate by 2027 as delays to critical energy transition projects cause major bottlenecks on the electricity grid. (3)
The Ai Group’s Roadmap
The Ai Group submission focuses on execution. It lays out seven practical recommendations to lift productivity in energy delivery:
Streamline environmental approvals by reforming the EPBC Act and delegating enforcement to accredited states.
Simplify project expectations to remove unnecessary or conflicting requirements.
Promote automation and smart workforce planning to offset labour shortages.
Improve community engagement to secure social licence faster and more effectively.
Advance smarter electrification to avoid unnecessary infrastructure costs.
Introduce clearer carbon signals to guide investment as coal exits.
Reform gas security policy to encourage efficient demand-side solutions.
The consistent theme is focus: stop burdening projects with peripheral demands, and get back to delivering energy that’s clean, reliable and affordable.
Why Private Capital is Critical
While governments can de-risk projects through mechanisms like the Capacity Investment Scheme, the lion’s share of funding must come from private investors. That capital is available—but only if the rules are clear and the runway is smooth.
The problem, as Ai Group and other industry stakeholders point out, is that it isn’t. Policy inconsistency, regulatory uncertainty, and political interference are deterring investment. In recent years, renewable project approvals have slowed, transmission upgrades have lagged, and coordination across states has frayed.
Ai Group put it bluntly: “Unless the rollout of new renewable capacity triples in pace, Australia will fall short of its targets and forfeit the economic benefits of clean energy leadership”
The Victoria Setback: A Case Study in Delay
One of the clearest examples of this breakdown is the Victorian Government’s decision to delay the VNI West transmission project — valued at $3.3 billion — until 2030. (4) The project is critical to unlocking renewable generation in western Victoria and connecting it to major load centres.
Its delay sends the wrong signal at the worst possible time. Investors are already wary of high costs and uncertain timeframes. A key transmission project being pushed back by five years reinforces concerns that the current energy planning process is too slow, too political, and too exposed to community and localised resistance.
If clean energy projects can’t connect to the grid, they don’t get built. If they don’t get built, coal stays in the system longer. That means higher emissions, higher fuel costs, and declining system reliability as ageing assets limp on.
Getting Back on Track
The Ai Group submission outlines a way forward, and it starts with focus. Energy projects should not be treated as the catch-all for every political and social objective. Whether it’s workforce participation targets, regional procurement quotas, or pre-lodgement community benefit agreements, these add cost and complexity, and often work against the goal of fast, affordable energy delivery.
That’s not to say communities don’t matter — they do. But as Ai Group argues, community engagement must be grounded in shared benefits, not political trade-offs. Likewise, environmental protection is essential — but it can be achieved through national standards and faster approvals.
The other critical reform is carbon policy. Right now, there is no clear long-term carbon signal in the electricity market. That’s fine when coal dominates and policy substitutes (like the Safeguard Mechanism) carry the load. But as coal retires and gas peakers become the last dispatchable option, the absence of a proper carbon framework will distort investment decisions.
Ai Group suggests several options—from generation intensity baselines to carbon border adjustments. The goal isn’t to tax the industry into submission. It’s to provide predictable price signals that guide investment toward the lowest-cost path to net zero.
The Bottom Line
Australia’s clean energy transition can’t succeed without private capital — and private capital won’t flow unless we clear the path. The Ai Group has laid out a credible blueprint: fix approvals, streamline expectations, and send clear investment signals. The delay of the VNI West project and potential cuts to solar output are reminders of what happens when we don’t. Every setback now compounds cost, complexity and risk later. If we want more clean energy, faster and cheaper, the time to act is now.
References
Australian Industry Group “Energy: More, Faster, Cheaper” July 2025 https://www.aigroup.com.au/news/media-centre/2025/energy-productivity-pitches-more-faster-and-cheaper/
Macdonal-Smith, Angela. The Australian Financial Review “Step Up on Energy rollout or lose out” July 09 2025 https://www.afr.com/policy/energy-and-climate/step-up-on-energy-rollout-or-lose-out-industry-s-warning-20250708-p5mdbf
Cropp, Ryan The Australian Financial Review “Solar farms forced to ‘switch off’ due to energy grid logjam” 10 July 2024 https://www.afr.com/policy/energy-and-climate/solar-farms-forced-to-switch-off-due-to-energy-grid-logjam-20250710-p5mdw5
Cropp R, Macdonald-Smith A, The Australian Financial Review “Key Victoria transmission line hit by two-year delay.” July 1, 2025 https://www.afr.com/companies/energy/key-victorian-transmission-line-hit-by-two-year-delay-20250701-p5mbr7
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