From coal to clean
At a glance
The energy sector is undergoing a pivotal transformation, moving away from fossil fuels to low-carbon sources to address the urgent climate crisis and meet increasing global energy demands. Coal remains the largest contributor to climate change, generating 35 percent of global electricity in 2023. To limit global warming to 1.5°C, the International Energy Agency urges a significant reduction in coal power, with OECD countries needing to cut coal's share to 14 percent by 2030, and the rest of the world phasing it out by 2040. This transition requires careful planning, repurposing of coal-fired assets, and collaboration across regions, with Australia and Asia facing similar challenges in closing coal plants. A clear, achievable path for the energy transition is essential for minimising environmental and economic impacts while ensuring affordability and continued growth.
Strategies for a successful energy transition
Achieving a successful energy transition hinges on effective strategies, such as minimising environmental impacts, maximising stakeholder benefits and creating strong business cases that de-risk the commercial aspects of energy projects. Key to this success is thorough stakeholder engagement, clear technical solutions and understanding the true costs and required infrastructure. While progress is being made in Australia, there is a lack of financial incentives to drive decarbonisation at the necessary pace, with no carbon pricing in place to make low-carbon solutions competitive with fossil fuels. The future of the energy transition will depend on developing financing strategies that combine loans, grants and technical support, along with government and financial backing, to drive the transition without penalising low-carbon alternatives.