Verdict
Yes, Australia’s power system can be comfortably powered with a high share of renewable energy, paired with energy storage technologies and back-up gas fired power generation.
Analysis
Solar and wind power, which are the lowest cost electricity generation technologies available today, are ‘variable’1. That is, their output varies based on access to solar and wind resources. This can lead some to assume that these technologies can’t form the basis of Australia’s energy system. However, in the same way that rainfall is stored in reservoirs and tanks for later use, renewable electricity can be stored in a wide range of energy storage technologies that are available and emerging. These include big batteries, whose costs have fallen significantly in recent years2; pumped hydro – which allows for hydro power generation on demand; and other emerging storage technologies such as compressed air and thermal storage.
Over the past two years, Australia has witnessed high levels of investment in large-scale batteries, which are increasingly being paired with solar and wind farms or connected separately to the grid to soak up lower cost power during the day to feed it back into the grid at times of peak demand3.
Solar, wind and energy storage will be key components of Australia’s future energy system, but they are not the only technologies required in the next generation power grid. The Australian Energy Market Operator’s Integrated System Plan sets out a blueprint for the least cost replacement of retiring coal-fired power capacity as a combination of wind, solar, different duration energy storage such as batteries and pumped hydro; home and commercial solar PV and batteries, as well as gas fired power generation for back-up supply, with stronger interconnection of our transmission network4. In this scenario, renewable energy supply represents 94% of total power system capacity by 2050.
The Australian National University went a step further and looked at the conditions needed for a power grid to run on 100% renewables. Its researchers found that an optimal mix of wind, solar, pumped hydro and biogas, with strong interconnection between regions, generates a supply of electricity with the same reliability as the current system5. In conclusion, a range of experts conclude that achieving a reliable and least cost power system for Australia features a very high share of renewable energy, where it is combined with energy storage facilities, good interconnection between regions, and a small amount of gas fired power generation for back-up power. Over time, fossil gas back-up can be replaced by renewable gas or other clean energy solutions.
References
1 – Commonwealth Scientific and Industrial Research. (2024). GenCost 2024-25 Report. URL: 24-00479_EN_INFOGRAPHIC_GenCost24-25Consultation_FINAL1_241.png (3508×2480). For the full report and other supporting information – click here
2 – Bloomberg New Energy Finance. (2023). Lithium-ion battery pack prices hit record low of $139/kWh. URL: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-hit-record-low-of-139-kwh/
3 – Clean Energy Council. (2025). Quarterly investment report: Large-scale renewable generation and storage. URL: https://cleanenergycouncil.org.au/getmedia/baf51990-48e7-4d0c-b88d-8920eb78d55f/cec-quarterly-report_q4-2024.pdf
4 – Australian Energy Market Operator. (2024). 2024 Integrated System Plan. URL: https://aemo.com.au/-/media/files/major-publications/isp/2024/2024-integrated-system-plan-isp.pdf?la=en
5 – Andrew Blakers, Bin Lu and Matthew Stocks. (2017). 100% renewable electricity in Australia, Energy, Vol 133, pages 471-482. URL: 100% renewable electricity in Australia – ScienceDirect
