As Australia pivots away from fossil-fuel power generation, significant investment is needed to ensure a smooth transition to clean energy. The country’s energy system is experiencing increased demand, fueled by a growing population, ongoing economic expansion and electrification.
The country’s last remaining coal-fired power stations are scheduled to be largely decommissioned over the next 10-15 years and replaced with lower-cost renewable energy sources. Renewables accounted for 40% of Australia’s power generation in 20241, and that share is set to accelerate significantly by 2030 as the system evolves to meet growing demand.
While Australia remains an attractive destination for energy investment, coordinating between state and federal policy settings continues to be a key challenge for construction and greenfield development; particularly regarding wind power due to the complex layers of planning and environmental approvals required across the East Coast. For developers and investors, the top priority is navigating and aligning with these evolving frameworks. Encouragingly, new initiatives at both state and federal levels are beginning to streamline approvals, signaling a more mature policy environment attuned to the scale of clean‑energy opportunity.2
Infrastructure imperatives
This transition is driving momentum across enabling infrastructure. Over the past 12 months, activity has increased in areas such as utility-scale renewables, energy storage, and transmission upgrades. In parallel, demand from energy-intensive sectors like data centers is reinforcing the need for reliable, scalable grid capacity.
To meet these challenges, major efforts are underway to expand and modernize the electricity network, boost renewable generation, and enhance storage systems. This marks the most significant transformation since the 1950s.3 However, phasing out of coal generation is creating a contraction in supply, and renewables alone have yet to fully bridge the gap.
Financing the transition
Significant capital injections, estimated at around $90 billion over the next decade, will be required to fund energy network development, increase renewable generation, and integrate storage and battery systems into the grid.
“Around $90 billion needs to be found within the next decade in order to fund the renewables roll out and firm up the energy grid. This is vital for supporting the further integration of renewables into the transmission network.”
Antony Steinberg, Head of Power, Utilities & Infrastructure, Australia, RBC Capital Markets
As capital needs grow, Australia is seeing increased momentum in both debt and equity financing to support the energy transition.
Portfolio financing, in particular, is emerging as a major area of activity. Driven by the consolidation of ownership across multiple generation assets, this structure allows sponsors to optimize debt capacity while benefiting from management and operational synergies.
At the same time, equity raisings for emerging and early-stage technologies are gaining traction. This segment remains closely tied to government frameworks and policy-driven preferences, which heavily influence where capital flows. As such, clarity and consistency in policy settings will be critical for unlocking further growth in this area.
“We expect the momentum behind portfolio financing to continue over the medium term, particularly as asset owners look to unlock scale efficiencies and optimize capital structures across increasingly consolidated platforms.”
Lisa Zhong, Director, Power, Utilities & Infrastructure, Australia, RBC Capital Markets
Consolidation and M&A trends
A growing awareness of investment opportunities in Australia’s energy market is driving a sustained increase in M&A activity, in which RBC Capital Markets has played a role. The consolidation potential of the sector is supported by financial capital from around the world.
“Many of the participants who entered the market through the purchase of renewable energy financing platforms and are now considering their next steps as they look to cement their position in the market through organic or inorganic growth or alternatively exit.”
Antony Steinberg, Head of Power, Utilities & Infrastructure, Australia, RBC Capital Markets
In recent years Australia has seen a number of significant transactions with financial capital and large offshore players, including leading European utilities. Many of these participants entered the market through the purchase of renewable energy platforms and are now considering their next steps as they look to cement their position in the market through organic or inorganic growth, or alternatively, strategic exits.
This puts a premium on in-depth understanding of the energy sector and expertise in executing cross-border transactions. RBC’s global M&A expertise and strong local knowledge of the Australian renewables market make the bank especially well-placed to help clients explore merger opportunities; having participated in the majority of platform financing deals in the renewables sector over the past 12-14 months.
Battery storage opportunities
Participation in the battery energy storage space has also been driving investor interest. This technology will be essential for ensuring an orderly transition from coal to renewables. Battery storage systems pick up the slack when wind and solar energy sources aren’t generating power; charging and releasing energy in order to smooth out power imbalances. This also reduces reliance on higher-cost fossil fuel generation, providing extra value to cost-conscious consumers and supporting business growth.
The first three months of 2025 saw the second-highest quarterly investment in large-scale battery storage on record, reaching $1.5 billion and delivering an additional 1.5GW in storage capacity.4 Several battery storage projects also began construction this year, adding 840MW in capacity. Further projects are in the pipeline representing 12.5GW in additional capacity.
As activity in the large-scale segment grows, M&A trends are evolving. While the past 12–18 months have seen predominantly single-asset battery transactions, the focus is now shifting toward developer-level deals. Over the next 12 months, platform-scale consolidation in the battery storage space is expected to become a key trend.
Beyond large-scale projects, household energy storage is also gaining momentum. In a significant policy shift, the re-elected Australian government introduced a AUD$2.3 billion subsidy to reduce the cost of home battery systems by up to 30%.5 While this marks a meaningful policy shift to accelerate household storage adoption, its full impact has yet to be reflected in many sector-wide renewable energy forecasts, underscoring how evolving policy settings can create short-term mismatches in market assumptions and investment models.
A market in motion
“.. With deep expertise in Power, Utilities & Infrastructure, we are well-equipped to manage complex energy transition transactions, positioning us to capture growth opportunities and consolidation activity in the Australian market.”
Lisa Zhong, Director, Power, Utilities & Infrastructure, Australia, RBC Capital Markets
With battery storage, platform consolidation, and policy-aligned capital flows all accelerating, the pace of change across Australia’s energy sector is only increasing. The country’s clean energy transformation is fully underway and entering a promising new era of investment. To capitalize on these opportunities, investors will need deep market insight, strong execution capabilities, and trusted partners with experience navigating complex transactions.
