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Where Does Energy in Australia Come From? 



Energy consumption is a fact of everyday life, whether you realize it or not. Flipping a light switch, turning on the stove, drawing hot water for dishes — all of these routine actions require some form of energy to be completed.

Many people don’t think about what kind of energy fuels modern conveniences or where it comes from. Australia is one of the world’s biggest consumers of energy sources, so it’s worth taking a look at where energy in Australia comes from.

Energy sources

Most of Australia’s energy is centrally generated and comes predominantly from traditional energy sources, or fossil fuels. The majority, 86 percent, of the country’s electricity is generated from fossil fuels: 73 percent from coal, and 13 percent from natural gas. Coal fired electricity is the cheapest form of energy to generate.

There are non-traditional energy sources at play in Australia as well. Renewable energy sources make up the remaining 14 percent. Hydropower has been used since the 1950s and is Australia’s largest source of renewable energy. Wind and bioenergy make up a small dent in the electricity mix, as they are considered intermittent energy sources due to being unreliable for consistent baseload power.

Where does it go? 

Australia has a large energy consumption. The largest sector consuming both electricity and gas is manufacturing at 27 percent. Close behind are households consuming about 25 percent, transport sector at 15 percent, and mining sector at 13 percent.


The country is rich in high quality energy sources which are distributed throughout the land, and has access to a range of abundant renewable energy sources which are yet to be developed. Coal is Australia’s largest commodity export as it has substantial quantities of both black and brown coal. The most significant coal resources are found in Queensland, New South Wales, and Victoria.

Large-scale utilization of Australia’s renewable energy resources has been hindered by high transformation costs, immature technologies, and long distances between markets and infrastructure. Hydro energy resources are mostly developed, and wind energy is on the rise.

Hydro energy resources are found within the highest areas of rainfall and elevation, chiefly New South Wales and Tasmania. Unfortunately, an overall dry climate combined with high evaporation rates and variable rainfall limits significant expansion of this renewable energy source.

On the other hand, wind energy technology is mature and rapidly expanding. It is expected by the Renewable Energy Target that wind energy will become Australia’s largest source of renewable electricity in the near future. The western, south western, southern, and south eastern coastal regions of Australia have the best wind energy resources in the world.

Bioenergy also has the potential to be a significant source of energy. Biomass, or organic matter, can be used to generate electricity and heat, and be used for the production of biofuels for transport.

At this time, Australia’s use of bioenergy for electricity generation is limited and confined to sugar cane residue, wood waste, and gas emanating from landfills and sewage facilities. A small yet promising amount of biofuels are currently produced, specifically ethanol from sugar by-products and waste starch from grains.

Customers can use third party providers to make informed decisions about the best options for gas and electricity. These services asks customers what type of energy plan they are interested in, and then helps them compare a range of plans and filter options based on what’s important. All energy sources come at a cost. To compare electricity prices in Australia, visit iSelect.

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