Australia’s Green Energy Transition: Vast Opportunities for Danish Exporters

Australia’s energy sources: Coal, oil and gas dominate

Australia is a major energy producer and exporter. Over the past two decades, Australia’s total energy supply has increased. The overall picture remains one of strong reliance on fossil fuels. Coal, oil and gas products dominate Australia’s energy mix, and accounted for 90% of energy supply (2024). This means that the country’s energy security is closely linked to domestic coal and gas production and to international commodity markets. While the share of coal has decreased, natural gas and oil products have both increased over the past two decades. Renewable energy sources such as hydropower, solar, wind as well as biofuels and waste have seen solid growth in recent years but still represent a relatively modest share of total supply of around 10% (2024).

Australia has a significantly higher carbon intensity than many other advanced economies. Australia has embarked on the green transition from a strong position as an energy producer and exporter. The federal government has committed to reducing greenhouse gas emissions by 43% below 2005 levels by 2030 and to achieving 82% renewable electricity generation by 2030. It has subsequently announced a 2035 target of 62–70% emissions reductions – a stepping stone towards net zero emissions by 2050.

Rapid growth in renewables: a greener power sector

Australia’s power sector is undergoing a remarkable shift and the country has seen a strong build out of wind and solar power. As a result, Australia’s renewable electricity generation has quadrupled, and the share of green power in the electricity mix is now significantly higher than it was just a few years ago. This development is clearly visible in the figure below. Coal as a power source has diminished. At the same time, generation from renewables has increased significantly and continues to rise year on year. According to IEA, renewable sources thus accounted for 35% of electricity production in 2024. According to Australia’s Clean Energy Council, the share has already reached 40%. In spite of variations in statistical method/definitions, both sources document the fast green transition in electricity.  

For Australia, this offers a pathway to reduce emissions while improving energy security and modernising infrastructure. For international partners such as Denmark, it creates a growing demand for solutions that can integrate large shares of wind and solar, balance fluctuating generation and enable efficient electrification in buildings.

Among the renewable energy sources for electricity, solar PV is the largest contributing 50% of total RE based electricity in 2024. Wind comes second at 32% with an installed capacity over 15 GW and firm growth rates of 14% annually on average for the past 10 years. Thus, wind is set to play a large role in achieving the national target of up to 82% renewable energy sources in the electricity generation by 2030, more than a doubling from today.

Green buildings on the rise

The strong expansion of renewables means that a substantial and growing share of Australia’s electricity is now produced without direct CO₂ emissions. This creates new options for decarbonising other parts of the energy system. As the power mix becomes greener, electrification becomes a key lever for reducing emissions in buildings, transport and industry. In other words, the rapid growth in renewable electricity does not only change how power is produced – it also opens the door for a broader, system wide transition.

A significant share of final energy consumption takes place in residential buildings and the services sector, with this share of Australia’s final consumption of energy reaching 23% in 2023. This makes the buildings sector an important instrument for reducing Australia’s fossil fuel dependence and overall energy demand.

Construction will be particularly brisk in the next several years. With high population growth and a downward trend in household sizes, there will be a need to build 250,000 new homes per year, significantly more than the current level of 180,000.

Australia’s National Construction Code has gradually been revised to reflect stronger carbon emission targets – particularly in the field of insulation and energy efficient systems and controls (for commercial buildings). The Green Building Council of Australia promotes New Zero Carbon Buildings got new buildings by 2030 and for all buildings by 2050.

Australia is taking decisive steps toward net zero by investing heavily in sustainable construction, urban retrofitting, and smart housing. According to Arup (2023), Australia needs to invest 131 billion DKK (18 bill. Euro) annually to achieve its green ambitions for buildings.

Danish exports of energy solutions to Australia

From 2015 onwards, total annual exports of Danish energy technology to Australia has been around 100 mill. Euro, with several years above this level. This variation has mainly been driven by wind energy exports, closely linked to the timing of large individual projects. In years with major wind projects, total exports have spiked; in years with fewer project deliveries, the export value has typically been around 100 mill. Euro. Preliminary statistics show that 2025 witnessed an increased export value of 7% - bringing the total value up to 108 mill. Euro / 800 mill. DKK.

District heating technologies, bioenergy solutions and other energy technologies contribute more steadily to the export figures, but wind explains most of the visible peaks troughout the period. Overall, the data underline that Denmark has established itself as a significant and reliable supplier of energy technology to Australia in recent years – and that the commercial relationship is already operating at a substantial scale, which can be further expanded as Australia accelerates its green transition.

Australia’s national targets – 82% renewable electricity by 2030 and 43% CO₂ reduction from 2005 levels – combined with today’s share of renewables at around one third of electricity generation and persistent grid constraints, underline the need for large scale investment and system solutions

Government co-operation – committing for the future

Denmark and Australia have significantly upgraded their green co operation in recent years. The Denmark–Australia Strategic Partnership Agreement (July 2023) sets the overall federal framework for collaboration on climate, energy and the green transition. It is complemented by state level agreements, notably the Denmark–New South Wales Net Zero Emissions MoU from 2022, which focuses on decarbonisation, energy systems and knowledge sharing, including staff secondments between authorities. 

Under the Danish Energy Agency’s global energy co operation programme (EGP), a task force on Australia was launched in 2025 to deepen regulatory co operation on offshore wind with the federal government and the states of Victoria and New South Wales. At federal level, the dialogue covers offshore wind legislation, spatial planning, environmental assessments and auction design; at state level, it concentrates on grid connection, ports and local implementation. 

The government to government framework positions Danish authorities and companies as natural partners in addressing these challenges and supports a deeper, long term green trade partnership between the two countries.