A resilient summer was capped with the extension of two coal-fired power plants as state governments hedged against rising prices — welcome to our extended catchup edition for those of you just returning to work.

Capital

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Origin Energy postponed the closure of the giant Eraring Power Station for another 20 months, from August next year until April 2029. The extension had been widely anticipated and comes as NSW has seen more frequent Lack of Reserve notices from AEMO.

Meanwhile, West Australian Premier Roger Cook cited energy security and affordability as the government announced it would extend its financial lifeline to Griffin Coal by up to five years. The coal mine supplies the privately owned Bluewaters Power Station, and employs around 400 people. Rystad Energy analysis shows power prices would jump nearly 20% if Bluewaters prematurely exits the WEM before enough replacement capacity is online.

In other capital news, rare earth aspirant Australian Strategic Materials Limited is set to be acquired by US-based uranium and rare earths producer Energy Fuels. The US Export-Import Bank has pledged US$600 million to ASM to help it build a refinery near Dubbo, now put in doubt by the deal.

Looking to the year ahead, Bloomberg New Energy Finance forecast $5.1 billion of investment in utility-scale solar and wind projects in Australia in 2026 (down on 2025), with wind accounting for 95% of the total.

On the data centre front, BNEF predicted 300MW worth of new capacity will begin construction in Australia in 2026, significantly below the estimated 10GW of proposed data centre capacity that exists around the country.

Meanwhile, data confirmed December 2025 was the highest month of renewable generation in the NEM at 9.5TWh (50.4% of total generation) and the WEM at 1.07TWh (53.9% of total generation).

Record heatwaves and catastrophic fires have not so far been matched by energy security challenges this summer. Instead, renewable energy records were broken.

Christmas day saw a new record in South Australia for minimum operational demand, the market operator announced, beating the previous record from October 2024 and seeing rooftop solar providing 91% of the state’s total generation.

Prior to the heatwave, milder temperatures also saw a new minimum operational demand record in Victoria on December 27, with both days leading to extreme negative prices. On the other side, when the heatwaves began on January 7 they drove underlying demand to what the experts at WattClarity posited could be the highest ever, at 40,000MW. And with the heat came a big spot price spike in NSW.

Climate

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In the US, law experts said it was unclear whether US President Trump could legally pull the US out of the UN Framework Convention on Climate Change without the consent of the Senate. On January 9 Trump announced the US would exit the UN treaty, making it the only country in the world to ever do so. Given the administration has already effectively withdrawn from most international climate activities, experts said this latest move will make little difference. (Carbon Brief) (Heatmap) (Politico) (Bloomberg)

Meanwhile, the European Centre for Medium-Range Weather Forecasts reported that 2025 was officially the third-hottest year on record, following record-breaking years in 2023 and 2024.

Policy

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Major energy retailers asked for more time to comply with the solar sharer offer, and warned the scheme needs more work to avoid disproportionately benefiting customers with batteries and electric cars while leaving lower-income households behind. On Friday the government released a consultation outcome paper setting out how it thinks the offer should be designed and implemented.

Gas connections to new commercial buildings should be banned nationwide, the Energy Efficiency Council said, on the back of a new report showing the benefits of accelerating electrification. Commercial buildings account for more than 10% of Australia’s national carbon emissions, the report shows, with the commercial sector accounting for 9.3% of Australia’s total domestic consumption of natural gas. Hotels and residential aged care facilities are among the highest users. Motivating building owners to undertake what can be tricky retrofits won’t happen without policy intervention, the EEC says.

Shared rooftop solar, balcony solar, community batteries and virtual power plants will all be considered as part of a Victorian inquiry into renewable and affordable energy for apartments. The Victorian inquiry will explore recent developments in energy supply and technology, along with the barriers and inequities renters and social housing tenants face in accessing renewable energy.

A national product stewardship scheme for small-scale solar PV systems and EV batteries is a step closer as the government responds to the final report of the Productivity Commission’s circular economy inquiry. The government committed $24.7 million over three years to deliver a national pilot for recycling solar panels and up to 100 pilot collection sites nationwide.

A critical minerals reserve prioritising antimony, gallium and rare earth elements will be in place by the end of the year as the government positions Australia for a support role helping the US reduce its reliance on China. Under the plan, the government will legislate to give more powers to Export Finance Australia. It will see the government secure rights to minerals produced in Australia and on-sell those rights to meet demand. The government said $1 billion of the expanded $5 billion Critical Minerals Facility would be provided for the transactions. And a further $185 million has been allocated for selective stockpiling of minerals, where required.

Energy Minister Chris Bowen confirmed the government’s Cheaper Home Batteries program had seen 200,000 batteries with around 4.7GWh of battery storage capacity installed in six months. Of those, 50,000 also installed solar for the first time. Rooftop solar installations, languishing at or even below 2022 levels for much of last year, recovered strongly in the last few months leading up to a new December record of 329MW.

Projects

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A project initially pitched as being Australia’s biggest solar hybrid power plant appears to have had its ambitions cut back, with a planning decision approving a major variation. The Eurimbula Hybrid facility is UK group Elements Green’s first development in the Australian market, and was originally expected to deliver a 696MW solar farm, along with two 333MW (2 hour) grid-forming BESS. The project variation brings the solar farm down to 350MW with the disturbance footprint halved. The project received technical clearance for grid connection in May last year and is part of a grant-funded research program supported by the Australian Renewable Energy Agency, in partnership with the University of Queensland, EPEC, SMA, AEMO and Powerlink.

Construction kicked off in Fortescue’s first wind project in the Pilbara. The 133MW Nullagine project will include 17 turbines from Chinese multinational Envision Energy that come with self-lifting towers and are designed for low-wind environments as well as extreme weather.

The Queensland government called for feedback on Potentia Energy’s 300MW/1200MWh Capricorn battery and Trina Solar’s 200MW/800MWh Pleystowe battery project as Queensland Planning Minister Jarrod Bleijie considers whether to call them in due to a lack of adequate community consultation. (Renew Economy)

Origin Energy said the first phase of its Eraring BESS was operational, boasting 460MW/1770MWh of storage. The fourth phase of the battery is expected to be operational by the first quarter of 2027.