On 21-22 October 2025, the nation’s leading energy and climate decision-makers gathered at the Australian Financial Review Energy and Climate Summit in Sydney to debate one of Australia’s most pressing questions: Is our system ready for the next phase of the energy transition?
Hosted at the Hilton Sydney, the two-day summit brought together more than 50 speakers spanning federal and state government, regulators, investors, industry, and community leaders. Discussions centred on balancing cost, carbon and capacity amid rapid technological change and growing geopolitical tension.
Navigating a fast-shifting energy landscape
While Australia’s decarbonisation trajectory is gaining momentum, participants cautioned that policy fragmentation and infrastructure bottlenecks continue to undermine investor confidence. East-coast gas policy and export commitments remain contentious, while global supply-chain pressures and trade-policy uncertainty have added complexity to long-term planning.
At the same time, the rise of AI (Artificial Intelligence)-driven data centres and electrified industry is redefining energy demand. Delegates asked whether grid modernisation and workforce readiness are keeping pace, and how governments can translate ambitious state-level targets into tangible, system-wide outcomes.
One speaker noted that everyone wants progress, but without coordination, the country risks building the future on yesterday’s grid.
Policy and technology in sync
A highlight of the event was the Climate Change Authority (CCA) session, where Chair Matt Kean underscored the power of the right policy settings to unlock innovation. He pointed to Australia’s rooftop solar and home-battery boom as proof that effective regulation and consumer appetite can accelerate decarbonisation.
“The cost of solar panels is down 90 per cent, and we are seeing a stampede of families installing batteries in their homes,” Kean said.
“Electric-vehicle prices are falling and could reach parity with petrol-powered cars by 2030.”
Kean rejected suggestions that optimism among energy regulators is only “surface-deep”, insisting that regulatory agencies are aligning around practical solutions to enable an orderly transition.
Western Australia signals new climate target
A major headline came from Western Australian Energy Minister Amber-Jade Sanderson, who announced that the State Government will introduce the state’s first legislated climate target next year. The move will bring Western Australia in line with eastern states that have already embedded their own targets alongside federal emissions-reduction goals.
“This will be an important milestone for Western Australia. It is about ensuring we have a clear, credible trajectory for industry and communities as we diversify our energy mix,” Sanderson said.
Data centres and the demand surge
Daniel Westerman, Chief Executive of the Australian Energy Market Operator (AEMO), highlighted the rapid rise in electricity consumption from emerging digital infrastructure. AEMO now projects that data centres could account for up to 12 per cent of total power use by 2040.
Fresh from meetings in Virginia, USA – home to 80 per cent of global internet traffic – Westerman cautioned that Australia faces similar challenges managing the “insatiable” demand of the digital economy.
“Every sector is electrifying, every home is adding devices, and every data packet requires power. Coordination between governments and industry will be crucial,” Westerman said.
The road ahead
Across two days of panels and hallway debates, one message resonated: Australia has the resources, the talent and the technology. What is needed now is alignment – between ambition and execution.
To find out more, visit https://live.afr.com/energy-climate/