A member of the Reserve Bank of Australia (RBA)’s Monetary Policy Board, which sets key interest rates, says that wages are not a major factor in price increases in Australia. In a speech to the University of Melbourne’s Centre for Employment and Labour Relations Law, Dr Iain Ross AO said there is “no evidence of the emergence of a wage-price spiral” in the Australian economy.
Global fossil-fuel emissions are set to fall by around 0.5% in 2026 amid the fallout from the Hormuz crisis, according to Carbon Brief analysis. The US-Iran war has severely disrupted trade through the strait of Hormuz, causing a spike in oil and gas prices that continues to ripple around the global economy.
At a side event during the 81st UN General Assembly, Prime Minister Feleti Teo of Tuvalu, and Ireland's Minister of State Timmy Dooley unveiled their shared vision for the Second Conference on Transitioning Away from Fossil Fuels (TAFF-2), to be co-hosted in Tuvalu in 2027. In doing so, Tuvalu and Ireland have just set the agenda for the next chapter of the fossil fuel transition. Australia needs to show up with more than talking points and have an action plan.
As Anthony Albanese and the world pretend to wring their hands over both the ‘inevitability’ of AI and the ‘struggle’ to set guardrails, the leader of Nepal delivered a speech that was infinitely more consequential. Addressing the United Nations General Assembly in New York on Friday, Prime Minister Balendra Shah thanked those who responded to the horrific floods in Nepal last month.
Ember’s new The Age of Power report poses an argument that should land hard in Australia: the race of this century is no longer just about who controls fuel, but who can produce, finance, coordinate and use cheap electricity best.
Change is already underway – electricity overtook oil as the largest source of ‘useful energy’ in 2007, and those same technologies driving the digital revolution are now driving the energy transition as well — chips, sensors, batteries, power electronics and motors.
The global evidence shows electrification is no longer a distant or marginal pathway. The deployment of solar and batteries now represents the fastest energy shift in human history. Historical deployment indexed from the first year each technology exceeded 100 TWh shows solar, wind and battery dispatch scaling faster than earlier major electricity technologies (Figure 1). This is not simply an emissions story; it is a manufacturing, learning-curve and capital-allocation story in which each deployment builds supply-chain capability and contributes to lower costs.
Figure 1. Global electricity generation by source and battery dispatch, indexed from the first year each exceeded 100 TWh.
This global shift should inform two policy consultations that are now before the federal government. Our submissions propose changes to:
The old policy instinct to answer these redesigns is to defend molecules.
The new strategic task is to accelerate electrons. Both federal mechanisms need redesigning around where electricity can replace fossil fuels most effectively. The answer is: almost everywhere, electricity can do the job directly.
The overall lesson for both Federal Mechanisms is simple: stop treating electricity, transport, industry, digital infrastructure and emissions policy as independent silos. The future is becoming one interdependent system, held together by various ways of using electricity. Countries that understand that will be cheaper, cleaner and more competitive. Countries that do not will end up paying more to prop up declining fuel-based systems while losing the race to build a new and sustainable industrial base.
Six principles follow for Australia:
First, electrify the service, not just the supply. The real contest is not whether the grid gets cleaner in isolation, but whether mobility, heat, mining, minerals processing, freight and industrial work shift from combustion to electricity. Ember’s useful-energy framing is important here: electric systems do more with less, because combustion wastes so much energy before it reaches the task.
Second, build abundant renewable electricity and storage to provide these services. Cheap electrons are now the platform for industrial competitiveness and can be provided directly where they are needed. In 2025, renewable generation overtook coal generation globally, and clean generation met all net growth in electricity demand. IRENA reports that most new utility-scale renewable capacity now produces electricity more cheaply than the lowest-cost fossil fuel alternative. For Australia, the broad cost argument is largely over. The task now is pace, delivery, integration and local application.
Third, digitally coordinate the system. The next bottleneck is not just generation cost but orchestration: connection queues, curtailment, negative prices, badly designed tariffs and inflexible demand. Australia already sees this in rooftop solar, batteries and transmission delays. Western Australia is especially exposed, because the SWIS is becoming a high-DER, inverter-rich system that will need much smarter management, stronger networks and far more flexible demand.
Fourth, use China’s scale without becoming captive to it. China is not only the dominant clean-manufacturing power; it is also the only major economy scaling electrification, renewables, EVs, batteries, robotics and AI simultaneously. Australia should use the cost deflation that Chinese scale is delivering, but not kid itself that resilience comes from imports alone. Strategic capability in grid equipment, power electronics, charging, processing, software, recycling and system integration matters as much as access to bulk energy.
Fifth, build around Australia’s defensible niches. We are unlikely to dominate every part of the electro-industrial stack, but we do not need to. Australia can be globally significant in renewable-powered mining and minerals processing, grid integration, remote and regional power systems, heavy transport charging, battery deployment, and renewable-powered industrial production. Western Australia sits at the centre of that opportunity, with its resource base, export infrastructure, isolated grids and growing renewable buildout.
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Sixth, treat capital access, market design and equity as core technology policy. This is where the Safeguard Mechanism review and liquid fuels consultation need to change gear. The point is not to preserve expensive liquid fuel dependence for longer than necessary; it is to reduce that dependence by electrifying transport and industry wherever possible, and reserving scarce low-emissions fuels for the uses that genuinely cannot electrify soon.
These principles imply four practical policy outcomes:
The purpose of the Safeguard Mechanism should be to drive real on-site abatement and the industrial investment needed to deliver it. It is not to provide a comfortable offset pathway for incumbent fossil operators. Particular care is needed here since there is a predictable tendency to protect current systems using subsidies. Where change is inevitable, policy should accelerate it and capture the benefits sooner, rather than subsidising resistance to it and protecting the status quo.
It is important to prioritise the distribution of benefits across the community. Electrification will deliver lower costs overall, but only if households, small businesses, regional communities and corporations alike have access to the hardware, finance and tariffs that make electrification viable. Without that, cheap renewable electricity becomes a private benefit for some, while others keep paying for the old system.
This is particularly a message for Western Australia. The state is moving away from coal by 2030. Major transmission and network investment is under way, and new renewable and battery projects are being contracted. However, the real destination is not merely replacing coal in the SWIS – especially if this means just substituting gas turbines – but using abundant renewable electricity to reshape mining, processing, services, transport and exports.
Liquid-fuels policy needs reframing. Security in the old system meant stockpiling reserves and securing stable supply chains for imported fuels. Security in the new system means renewable generation and storage, stronger grids, electrified transport, smarter demand, and domestic capability in the system’s design, construction and maintenance. This does not mean abandoning liquid fuels overnight. It means not mistaking continued dependence on old, expensive and inefficient systems for a durable, future-facing national strategy.
Australia still spends too much time arguing about the transition as if it were mainly a climate obligation. It is now the world’s largest industrial race. The countries that win will be electrostates with cheaper power, deeper electrification, faster approvals, stronger capital markets and smarter coordination. Australia has the resources to be among them.
The policy test is whether Australia acts as though it understands the reality: this is the fastest energy-technology shift in human history, and deep electrification is the pathway to its economic, social and security benefits.
Professor Ray Wills is a Western Australian sustainability and technology strategist, Managing Director of Future Smart Strategies and Adjunct Professor at The University of Western Australia
Professor Peter Newman AO is Curtin University’s Professor of Sustainability.
Howard Buckley is Chief Executive Officer of Future Smart Strategies.
Together, Wills, Newman and Buckley bring deep and complementary expertise in sustainable development, urban and regional planning, clean-energy transition, project development, and community stewardship.
