Response To The Australian Industry Group’s Report
The Australian Industry Group (Ai Group), through its latest policy paper, has once again issued a clear warning to policymakers. Unless Australia reforms its approval processes, improves coordination between states and attracts private investment at scale, the country risks losing its competitive advantage in clean energy.
In its report Energy: More, Faster, Cheaper (1), the Ai Group argues that slow project approvals, rising costs and unclear policy signals are putting the nation’s energy transition in jeopardy. Over a dozen industry bodies have now joined that call, warning that Australia will miss its net-zero targets unless renewable deployment accelerates significantly.
The scale of the challenge is immense. Australia must install more than 160 gigawatts (GW) of new solar and wind generation over the next 25 years to replace coal-fired power stations and meet growing electrification demand. That means adding 6.6 GW per year — double today’s rate — and up to 13.6 GW in peak years. (2) And that’s just for domestic use. If Australia wants to compete globally in green hydrogen, ammonia and low-carbon metals, the bar rises higher still.
These targets already look ambitious. According to the Australian Energy Market Operator, grid congestion will force almost every large solar farm in the south-eastern states to curtail up to one-third of their output by 2027 as transmission upgrades stall. (3) That means clean energy we already have cannot get to market, even as demand continues to grow.
The Ai Group’s Roadmap
The Ai Group’s submission focuses on execution and lays out seven practical recommendations to lift productivity and accelerate 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 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 message is to focus on getting projects built. The Ai Group argues that well-intentioned but competing objectives have slowed delivery, added costs and eroded investor confidence.
Why Private Capital Matters
Governments can help de-risk projects through schemes like the Capacity Investment Scheme, but the majority of funding must come from private capital. That capital exists — but it will only flow where the rules are clear and consistent. At present, policy uncertainty, regulatory overlap and political interference are undermining investor confidence. Project approvals have slowed, transmission upgrades have slipped behind schedule and intergovernmental coordination has weakened.
The Ai Group makes the point 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.”
A Case Study in Delay - A Victorian Example
One of the clearest examples of this challenge is RWE’s recent decision to abandon its planned 2 GW offshore wind project in Victoria’s Gippsland zone. As reported by RenewEconomy, the German energy giant cancelled the development after a year of feasibility work, citing high supply-chain costs and delays to the Victorian Government’s first offshore wind auction. (4)
The project, known as the Kent development, was expected to power more than a million homes and form part of the state’s 9 GW offshore wind zone. Its cancellation follows earlier warnings from other developers that long approval timelines, unclear policy frameworks and escalating construction costs are creating untenable risks.
For investors, RWE’s withdrawal sends a troubling signal. The company operates 19 offshore wind farms worldwide and remains committed to Australia’s energy market through onshore wind and battery storage. Yet even with that global expertise, it concluded that the economics no longer stacked up. This decision highlights the broader structural issue raised by the Ai Group: the approval, financing and coordination processes are too slow and too fragmented to support large-scale investment at the required pace.
The risk is that every delay compounds the next. When transmission projects fall behind, generation cannot connect. When generation is uncertain, manufacturers and supply chains hesitate to scale. The result is a feedback loop that slows the entire transition and weakens Australia’s claim to leadership in clean energy.
Getting Back on Track
The Ai Group’s submission points to a path forward. Energy projects must be assessed primarily on their capacity to deliver clean, reliable and affordable power. Policy should enable that outcome, not burden it with competing objectives. Community engagement and environmental protection remain essential but should be streamlined through national standards, faster approvals and clear benefit frameworks.
Equally critical is the introduction of long-term carbon signals. Without a predictable carbon framework, investment will continue to gravitate toward short-term or policy-dependent incentives. Ai Group suggests several mechanisms — from generation-intensity baselines to carbon-border adjustments — to provide stable market signals and direct capital toward the lowest-cost pathway to net zero.
The Bottom Line
The Ai Group has delivered a clear warning that cannot be ignored. Australia’s energy transition will fail without faster approvals, better coordination and stronger investment signals. RWE’s exit from the Gippsland offshore wind project shows the risk is not theoretical. Every cancelled project delays the next and raises the cost of decarbonisation for all. If we want more clean energy, faster and cheaper, we need to clear the bottlenecks now. The blueprint exists. What remains is the will to act.
References
Australian Industry Group, Energy: More, Faster, Cheaper, July 2025. Available at: https://www.aigroup.com.au/news/media-centre/2025/energy-productivity-pitches-more-faster-and-cheaper/
A Macdonald-Smith, Step Up on Energy rollout or lose out – industry’s warning, The Australian Financial Review, 9 July 2025. Available at: https://www.afr.com/policy/energy-and-climate/step-up-on-energy-rollout-or-lose-out-industry-s-warning-20250708-p5mdbf
R Cropp, Solar farms forced to ‘switch off’ due to energy grid logjam, The Australian Financial Review, 10 July 2024. Available at: https://www.afr.com/policy/energy-and-climate/solar-farms-forced-to-switch-off-due-to-energy-grid-logjam-20250710-p5mdw5
R Williamson, RWE scraps Gippsland offshore wind project due to costs and auction uncertainty, RenewEconomy, 15 October 2025. Available at: https://reneweconomy.com.au/rwe-scraps-gippsland-offshore-wind-project-due-to-costs-and-auction-uncertainty/
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