Australia's Energy Bets on a Slow Transition May Prove Risky

Australia's energy decisions may shape the next several decades, but the country is making bets based on a slow transition to renewable energy. However, historical data and S-curve projections suggest that Australia is approaching the steep middle section of the transition, where rapid growth and self-reinforcing adoption occur.

Renewable electricity growth and fossil-fuel decline have followed an S-shaped adoption curve, with costs falling, products improving, and wider acceptance producing rapid growth. The Australian government's decisions on infrastructure, such as the proposed oil refinery and North West Shelf gas project, should be assessed against the likely trajectory of renewable deployment, cheaper batteries, accelerating electrification, and falling oil demand in transport.

The S-curve model suggests that Australian wind and solar are nearing or entering the steep middle section, with renewable growth displacing coal-fired generation through the late 2020s and early 2030s. The proposed oil refinery is a large bet on a slow transition, assuming favorable conditions for decades to come, including stable fossil demand and LNG prices.