Renewables Overtook Coal in Australia for the Very First Time
In September 2025, Australia passed a historic milestone: for the first time, electricity generated from renewables (solar, wind, hydro and biomass) surpassed electricity from coal. Renewable generation reached 9.24 terawatt hours, compared with 8.8 terawatt hours from coal (The Guardian, 2025).
Globally, the same shift occurred earlier in the year, with renewables overtaking coal in total electricity generation during the first half of 2025 (Ember, 2025).
What drove renewables past coal?
1. Record renewable output in Australia
Australia’s milestone was driven by strong generation from wind farms in Tasmania and solar projects across the country, alongside a dip in coal output from ageing power stations (Renew Economy, 2025).
2. A global surge in clean energy
Globally, renewables, primarily solar and wind, grew fast enough in early 2025 to outpace overall electricity demand growth (Ember, 2025). Solar energy alone met 83% of new global demand, while coal generation fell by 0.6% year-on-year (Argus Media, 2025).
3. Economics and technology convergence
Falling costs of solar PV, wind turbines and battery storage are reshaping the market. Renewables are now not only cleaner but often cheaper to build and operate than fossil fuel plants, particularly when factoring in carbon risks, regulatory tightening, and long-term maintenance costs. At the same time, coal plants face operational inflexibility: many now cycle on and off during low-demand periods, leaving more space for renewables to dominate daily generation peaks (Renew Economy, 2025).
What this means for investors
Revisit portfolio assumptions
Many investment models still assume fossil fuels will dominate power generation for decades. These assumptions are now outdated and carry stranded-asset risk.Increase exposure to clean infrastructure
Investment in solar, wind, battery storage, and smart grid technologies offers growing returns, supported by policy and market trends.Engage on transition policy
Investors have a crucial role to play in supporting the policy and regulatory frameworks that enable rapid clean energy deployment.Link electricity to broader decarbonisation
As clean power expands, electrification of transport, heating, and industry becomes more viable, unlocking wider emissions reductions and new markets for investors.
As renewables outpace fossil fuels, ethical and impact investors are in the strongest position to benefit, aligning financial performance with a sustainable, low-carbon future.
References
Argus Media (2025). Renewables overtake coal for power generation in 1H 2025. https://www.argusmedia.com/en/news-and-insights/latest-market-news/2739512-renewables-overtook-coal-for-powergen-in-1h-ember
Ember (2025). Global Electricity Mid-Year Insights 2025. https://ember-energy.org/latest-insights/global-electricity-mid-year-insights-2025/
Renew Economy (2025). Renewables overtake coal for first time on monthly basis in Australia’s main grid. https://reneweconomy.com.au/renewables-overtake-coal-for-first-time-on-monthly-basis-in-australias-main-grid/
The Guardian (2025). Electricity from renewables overtakes coal in Australia for the first time. https://www.theguardian.com/news/ng-interactive/2025/oct/13/electricity-from-renewables-overtakes-coal-in-australia-for-the-first-time
