Australia  stands  at  the  forefront  of  a  global energy  transformation.  Its National Electricity Market (NEM) is currently navigating a monumental transition  from a reliance on centralized  coal-fired power generation to an embrace of variable renewable energy  (VRE). Notably, Australia’s commitment to renewable electricity capacity installation surpasses that of other nations, being 2.5 times greater than its closest competitor, Germany, as in 2019 (Stocks et al., 2019).  Furthermore, Australia distinguishes itself as a pioneer in solar PV generation, much of which is derived from household rooftop installations (AER, 2021).

        Historically, the trajectory of  Australia’s electricity industry reforms spanned several decades, primarily focusing on deregularization. However, the narrative  has evolved in recent times. The imperatives of climate change, advancements in technology, and the ageing of coal-fired  generators have steered the latest wave of reforms. Originating with a robust fleet of  coal-powered  plants, the NEM has been predominantly fuelled by fossil fuels, positioning the electricity sector as a significant contributor to the nation’s greenhouse gas emissions (AER, 2021).

        With the pressing challenge of climate change, Australia’s electricity sector bears  a   crucial responsibility. It is instrumental in actualizing the country’s  emissions reduction goals, especially the ambitious net-zero carbon dioxide emissions target set by state governments. Renewables, in this context, emerge as pivotal players in the decarbonization process. Yet, the transition is not without its dilemmas. Balancing emissions reduction with the dual imperatives of   affordability and system reliability —often referred to as the “energy trilemma” — poses a significant challenge.

        This policy brief seeks to illuminate the evolving landscape of Australia’s energy sector, exploring pertinent  policies,  elucidating  challenges,  and proffering  recommendations for a sustainable renewable energy future.