Battery boom fuels transition: BloombergNEF

Australia's clean energy transition is gathering pace, with record investment in renewable energy battery storage and electric vehicles, but emissions reductions remain too slow to meet the nations climate targets, according to BloombergNEF's latest Australia Energy Transition Outlook.

The report found investment in utility-scale of 2026 increased compared with a year earlier, while battery storage continues to emerge as one of the fastest growing segments of the energy market.

BloombergNEF said Australia will need to accelerate decarbonisation across electricity transport and industry if it is to meet its commitment to reduce emissions by 62% to 70% below 2005 levels by 2035 and achieve net zero emissions by 2050.

Economy-wide emissions fell just 1.1% year on year in the final quarter of 2025, highlighting the scale of the challenge despite continued growth in renewable energy.

Battery storage was identified as a standout performer, with almost 10GW of utility-scale battery capacity under construction and nearly 2.9GW commissioned during the first half of 2026. BloombergNEF forecasts utility-scale battery capacity will increase to 37GW by 2035.

The outlook for household batteries has also strengthened significantly following the introduction of the Federal Governments Cheaper Homer Batteries Program, with cumulative small-scale battery capacity now expected to reach 61GWh by 2035, 71% higher than BloombergsNEF's forecast six months ago.

Renewable electricity generation continued to expand, with wind and solar supplying 38% of electricity across the National Electricity Market during the first half of 2026. Including hydro generation, renewables accounted for 44% of total generation, up form 40% a year earlier.

However, BloombergNEF warned Australia remains off track to achieve the government's target of 82% renewable electricity by 2030, citing slower than expected wind project development.

The report also highlighted strong momentum in transport electrification, with an estimated 131,725 electric vehicles sold during the first half of 2026, putting the market on track to surpass last year's record. Higher fuel prices, fuel security concerns and the New Vehicle Efficiency Standard were identified as key drivers of demand.

BloomerbergNEF said Australia has built significant momentum through record investment in clean energy infrastructure but noted the next decade will determine whether that investment translates into emissions reductions at the pace required to meet the nation's climate commitments.