The lights haven't gone out, but confidence has. For a decade, Australia's energy transition has stumbled from plan to panic, promising cheaper, cleaner power while delivering neither in full. The problem isn't the destination - net zero - but the map. Somewhere between ideology and inertia, the system lost its logic.
Introduction
Australia's transition hasn't bogged down for lack of technology or resources, but because we acted as if politics, technology and time would fall neatly into line - cutting corners, overpromising, and drifting through years of delay and denial. The result is a transition built on collisions between markets and physics, ambition and trust, ideology and engineering - a system now trapped by its own illusions, with no painless way out.
To make sense of this impasse - a grid flooded with cheap power by day and stretched thin at dusk, a politics still arguing about 2012 - we need to see three layers of failure:
- First, the seven sins that got us here - institutional and policy design errors that broke public trust.
- Second, the seven sins of the net-zero true believers, whose moral urgency often outpaces the system's capacity.
- And third, the seven sins of the net-zero delayers and abandoners, who mistake the pain of transition for proof that the old order must be restored.
Together, these twenty-one missteps explain why a continent-sized power system, blessed with wind and sun, keeps tripping over itself.
The Sins That Got Us Here
The road to net zero began with a series of unforced errors. Long before ideology took hold, Australia's problems were technical, regulatory, and cumulative - the quiet product of mismatched incentives and policy drift. These early missteps built the architecture of mistrust that still shapes the politics of energy today.
Policy and trust failures
The first sin came wrapped in copper and steel: the poles-and-wires fiasco. Between 2007 and 2013, regulated network businesses overbuilt distribution assets, inflating their regulated bases and guaranteed returns. This was a regulatory failure of the first order: a funding model that rewarded spending on unnecessary assets, paid for by consumers over subsequent decades. Electricity bills soared, but the public blamed carbon policy instead of regulatory mis-design. The result was long-term mistrust in any state-directed reform - a political scar that still distorts energy debate.
The second sin was carbon-policy whiplash. From Howard's adoption of an emissions trading scheme in principle, to Rudd's failed Carbon Pollution Reduction Scheme (CPRS), to Gillard's carbon price, to its repeal under Abbott, and the collapse of Turnbull's National Energy Guarantee (NEG), a decade of reversals told investors that climate policy in Australia is not bankable. Projects froze, risk premiums climbed, and the system lost the decade when it could have built firming, transmission, and confidence.
Infrastructure failures
Then came the gas bet gone wrong. Policymakers assumed abundant, cheap gas would bridge the gap as coal declined. Instead, LNG exports linked domestic prices to global energy prices, ending decades of local price insulation. Australia rightly sought world-class prices for its gas, but the east coast never built a domestic buffer to protect households and industry once exports took off. Gas became expensive. When coal generators began retiring, gas couldn't economically fill the gap. Today, new batteries are increasingly replacing relatively new but now uneconomic gas peakers, while ageing coal is being asked to perform a peak-supply role it was never designed for.
The next sin was insufficient transmission. Australia built too much of the wrong network and too little of the right one. Distribution networks were overbuilt during the gold-plating era, while transmission - the highways needed to move renewable power - lagged behind. Renewable Energy Zones existed on paper long before the lines to connect them did. Planning approvals dragged, communities resisted the visual footprint, and costs spiralled. The grid we have still links yesterday's coal basins more reliably than tomorrow's renewable corridors.
Market and governance failures
The fifth sin was the unmanaged coal exit. Plants closed early and abruptly, driven by market arithmetic: rising maintenance costs and shrinking daytime revenue in a grid flooded with solar made them uneconomic long before policymakers were ready. Each closure left governments scrambling for emergency firming deals or capacity tenders. Reliability risk became a political crisis, further feeding scepticism about renewables.
Then came the neglect of system strength and inertia. The market rewarded energy volumes but not the stabilising services once supplied "for free" by big spinning machines. Frequency control, voltage support, black-start capacity - all invisible until they vanish. By the time regulators caught up, AEMO was issuing frequent constraint equations just to keep the system upright.
Finally, fragmented governance turned a technical problem into a political maze. Too often, governments of both stripes prioritised election-cycle point-scoring over the bipartisan planning required to endure for decades. The Commonwealth dithered, states improvised, and quango institutions multiplied and competed. The Energy Security Board folded amid its own consultation fatigue. Nobody owned the transition's overall design.
These seven sins produced a paradoxical system: over-capitalised yet under-resilient, rich in renewables yet starved of coordination, and living through a daily feast and famine of electrons. They were not ideological errors so much as institutional ones - proof that even in an age of markets, design still decides destiny.
But institutional failure did not occur in a vacuum. The debate around these failures became its own pathology, split between moral fervour and nostalgic denial.
The Sins of the Net-Zero True Believers
If the first failures were bureaucratic, the next are cultural. The "net-zero true believers" are right about the science and the stakes, but their rhetoric often outruns the system's capacity to evolve.
Misreading the system
The first sin is treating climate action as a project of constraint rather than abundance. Early policy framed energy as something to be rationed through taxes, caps, trading-schemes and penalties, not rebuilt through overwhelming new supply. Electricity became a moral expense, not a platform for prosperity. But decarbonisation only works if clean energy becomes abundant, cheap and reliable enough to electrify industry, transport, heat and mining. By fixating on restraint instead of production, believers helped create a politics of fear - of higher prices, lost industry and enforced scarcity - rather than a politics of opportunity anchored in green-energy abundance.
The second is physics blindness - the belief that determination can replace physical law. The grid does not bend to belief. It runs on frequency, inertia, and dispatchable capacity, not moral intensity. In practice, this blindness produced a patchwork grid where anything green was deemed good: projects added wherever approvals were easiest, not where stability required them. The result is a patchwork evolution of generation, shaped more by opportunity than by system design.
Mispricing the transition
A third sin is cost romanticism. Falling "levelised costs" of wind and solar are cited as proof of cheap renewables. But the levelised cost measures generation, not reliability. Integration - firming, redundancy, transmission, and workforce - multiplies the bill. The real expense lies not in turbines but in building a system that delivers to more than ten million households reliably. Industry once enjoyed some of the cheapest industrial electricity on the planet. That competitive advantage is now gone, despite renewables being cheap to generate, because system integration costs have multiplied.
The fourth sin is neglecting social licence. Transmission towers and wind corridors now face the same backlash once reserved for coal mines. The transition is land-hungry and local. Consent, not capital, is the binding constraint.
Misleading the public
The fifth sin is moral absolutism - the belief that decarbonisation is a test of virtue rather than an exercise in sequencing and engineering. Urgency becomes binary: act now or the reef dies. This framing mobilises the faithful but alienates the persuadable, collapsing a complex global coordination problem into a morality play. The reef does not live or die on Australia's emissions alone; it lives or dies on the world's. Australia must still act - because collective action unravels the moment smaller emitters defect - but moral intensity cannot replace system design. Transitions are built step by step: on what gets built first, what retires last, and how the pieces stay upright in between. When urgency hardens into absolutism, engineering gives way to symbolism, and the public stops listening.
Sixth, hostility to transitional tools. Gas peakers, carbon capture and offsets are dismissed as heresy. Yet systems can't leap gaps in a single bound; they cross them on scaffolding. A pathway that ensures reliability, even if it has some emissions, is essential if we are to reach the destination - because if reliability fails, the energy transition fails with it.
And seventh, technological utopianism - the belief that future innovation will somehow solve the problems we avoid planning for today. Believers promote ambitious targets while assuming "future us" will find the missing transmission, the skilled workforce, the firming technology and the grid stability not yet built. That optimism becomes a licence for governments, regulators and network planners to defer hard choices - assuming technology will close the gaps they have not planned to bridge. But hope is not a system design. Software doesn't fix inertia; falling costs don't replace coordination. Transitions fail when technology is expected to do the work of planning.
The believers' zeal sustains momentum, but their blind spots sap credibility and risk reliability. When virtue outruns engineering, the public stops listening - and when reliability falters, support evaporates altogether.
The Sins of the Net-Zero Delayers and Abandoners
If moral certainty distorts from one side, nostalgia and hesitation distort from the other. Many style themselves as 'delayers' - pragmatists urging caution. But their seven sins reveal something closer to abandonment: the fantasy that the 1990s order can somehow be restored, that physics can be denied, and that the industrial race can be ignored. Their seven sins fall into economic illusions, technical misunderstandings, and political failures.
Economic illusions
The first is energy nostalgia - the fantasy that 1990s coal economics can return. Those plants were profitable because demand was steady, fuel was local, and the grid was flat. Today's market is flooded each day with cheap solar energy before a drought at dusk. That duck-curve dynamic makes baseload coal uneconomic: inflexible generators can't ramp up and down with solar's rhythm. The old load shape is gone, and it's not coming back.
Second, cost illusion - clinging to decade-old perceptions that renewables are expensive while ignoring fuel volatility and the cost of replacing an ageing coal fleet. Since 2021, wholesale prices have been driven by rising coal and gas costs, not wind or solar. The cheapest energy in Australia is now the midday oversupply that has to be curtailed.
Third, false security in export markets - assuming Asia's hunger for coal and gas will remain insatiable. Yet Japan, Korea and China are building renewables, nuclear and storage at scale. The world is de-risking away from imported fuels.
Technical misunderstandings
Fourth, physics denial - claiming coal is reliable and renewables are not. In truth, the coal fleet is deteriorating, with forced-outage rates rising significantly in the past decade. Reliability now depends on designing a system around the supply and demand patterns of the present and future, not the past.
Fifth, short-termism - celebrating one mild summer or quarter of stable prices as proof that nothing must change. Deferred firming today guarantees reliability crises tomorrow.
Political failures
Sixth, cultural polarisation - treating energy as identity: wind turbines as left-wing totems, utes and gas stoves as cultural defiance.
And seventh, strategic blindness - the failure to see that decarbonisation is now an industrial race, not an environmental nicety. The United States, Europe and China are weaponising climate policy as industrial policy. Australia, with its minerals, renewables and geography, risks arriving late to the new economy. The danger is not moving too fast, but too slow to matter.
The abandoners ignore that the grid itself has already changed. The solar flood and evening drought have remade dispatch economics. Coal can't recover its 1990s economics because the daily shape of demand and price has permanently shifted. Nostalgia is not strategy; it's a category error.
Yet not all resistance is folly. For coal workers, regional towns, and energy-intensive industries, the costs of transition are immediate while its benefits feel remote and conditional. Their skepticism is not always denial; sometimes it is memory - of jobs that paid, systems that worked, and a time when policy did not change with each election. Nonetheless, the grid itself has changed. Daily floods of solar power and evening droughts of supply have rewritten dispatch economics. Stability and abundance cannot simply be restored by wishing back baseload. The mistake is not in remembering that reliability mattered, but in assuming it can only be found by returning to the past. A credible transition must therefore offer not just decarbonisation, but renewal - new work, new industry, and new forms of security rooted in energy abundance, not nostalgia.
Honesty and Hard Work, Not Ideology
The twenty-one sins divide into three temperaments - bureaucratic, moralistic and nostalgic - but share one root: the refusal to integrate markets, institutions and physics.
The bureaucrats, and their political masters, designed badly and frequently changed their minds - fragmenting authority and mistaking process for policy. The believers wanted change at any cost, mistaking urgency and purity for engineering. The abandoners cling to the past, convinced that reliability can only be restored by returning to it. Different errors, same flaw: each mistook their preferred narrative for the system itself.
Many of these so-called sins were rational acts within flawed incentives. Network owners gold-plated their assets because regulation rewarded it. Generators exited early because maintenance costs and the loss of daytime demand outpaced revenue. What looks like nostalgia in coal towns is often realism about lost livelihoods. And not every failure was foreseeable - policymakers in 2010 could not know gas prices would quadruple or that renewables would plunge so fast in cost. Some of this was mis-design, some misfortune, much of it inertia.
But understanding how we arrived here doesn't make the path forward any easier. Australia's transition now sits in the worst possible place: too far gone to turn back, not far enough forward to declare success. The old system is dying on economics alone. The new one exists only in fragments. And the window for orderly transition - the years when we could have built transmission ahead of need, retired coal on schedule, and maintained public trust through visible progress - has closed.
What remains requires a different politics: one built on honesty rather than promise. That means admitting what the transition will actually cost - not in slogans about cheapest energy ever or warnings of economic suicide, but in dollars, timeframes, and trade-offs the public can assess. It means explaining where the risks actually lie: in grid stability during the crossing, in communities that will lose industries before new ones arrive, in the chance that we build too slowly to matter or too quickly to maintain reliability. And it means walking the public through the strategy - not just announcing targets, but explaining what gets built first, what retires when, how the pieces connect, and what happens if something goes wrong. The public can handle difficult truths. What they cannot handle is being sold certainty that doesn't arrive, or simplicity that doesn't exist.
That politics must then treat energy as nation-building infrastructure, not partisan territory: planning transmission as generational public work, sequencing change so the system stays upright while it transforms, and aiming not for survival at higher cost but abundance at lower cost - electrons so plentiful and cheap they power not just homes but new industries.
The goal was always rebuilding a continental power system while keeping the lights on, the economy running, and the public onside. We've muddled through to a point where there are no cheap options left and no way to avoid the expense and difficulty we spent years deferring. The lights haven't gone out. But confidence won't return through rhetoric or nostalgia. It will return when the system works - when abundance replaces scarcity, when promises align with physics, and when the transition finally becomes what it should have been from the start: not a burden to be endured, but a platform to be built.
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