Australia is making big bets on a slow transition, but the technology S-curve tells a different story

Australia is making energy decisions that could shape the next several decades by looking in the rear-view mirror.

The technologies replacing fossil fuels – solar, wind, batteries, electric vehicles and electrified industry – have always followed the familiar S-shaped adoption curve.

The early years are slow: costs are high, supply chains are thin, products are unfamiliar and uptake is largely confined to enthusiasts and early adopters. Then comes the steep middle section of the curve, when falling costs, better products and wider acceptance produce rapid, self-reinforcing growth.

That is the point we are now approaching.

For years I have despaired at how slowly we have moved away from fossil fuels. My friend and research colleague Professor Peter Newman sees it rather differently. Peter is irritatingly optimistic about the transition. I remain a card-carrying, signed-up doomist.

So I decided to test my pessimism.

Using historical Australian and global energy data, I applied simple logistic S-curve projections to renewable electricity growth and fossil-fuel decline. The results surprised me. They suggest that Australia – and perhaps the world – is approaching the steepest part of a transition that has been under way for decades.

This does not mean we can forecast the future precisely, but it does mean that decisions based only on recent linearly interpreted trends may be highly misleading.

A government that assumes tomorrow will look like yesterday may approve infrastructure that needs steady fossil-fuel demand for 30 or 40 years, just as the market begins changing much more quickly than it expects.

That is the stranded-asset risk Australia should be taking seriously.

What an S-curve tells us

Most disruptive technologies follow an S-curve from the outset. The curve is not something that appears only once a technology has become successful; it is the usual pattern of the whole adoption process.

In the early phase, growth is real but can seem modest. A technology can be improving rapidly while still accounting for only a small share of the market. Then a tipping point is reached. Prices fall, performance improves, supply chains mature, customers become familiar with the product, and adoption begins feeding on itself.

This is the steep middle of the S-curve: the stage at which a transition that once seemed implausible suddenly looks inevitable.

We have seen it before. Mobile phones, personal computers and the internet all looked peripheral until they did not. Solar PV, wind power, home batteries, electric vehicles and heat pumps are following the same broad pattern, though each has its own technical, economic and policy constraints.

The problem is that governments, investors and commentators often plan as though the future will be a continuation of the recent past. They see renewables or electric vehicles as a minority share, today, and assume they will still be a modest share in 10 years’ time.

But that is precisely how major technological shifts are routinely underestimated.

My modelling suggests that Australian wind and solar are now nearing, or entering, this steep middle section. On the assumptions used, renewable growth increasingly displaces coal-fired generation through the late 2020s and early 2030s. 

The point is not that the model identifies one magic year when fossil fuels disappear. Grid bottlenecks, delayed transmission, storage deployment, industrial demand, policy reversals, international events and technology breakthroughs will all affect the outcome.

The point is that the economics are changing.

Infrastructure built on the expectation of stable fossil demand for decades may find itself running at lower utilisation, earning thinner margins and seeking taxpayer support far sooner than its proponents expect.

That is the real danger of a stranded asset: infrastructure that loses value well before the end of its intended life because technology, markets, regulation or public expectations have changed.

Betting on the slow transition

That is why the proposed oil refinery, the extension of the North West Shelf gas project, the extension of the Hunter Valley Operations coal mine…etc.  should not be assessed simply against today’s fuel demand, today’s LNG prices or the last decade’s rate of change.

They should be assessed against the likely trajectory from here: faster renewable deployment, cheaper batteries, accelerating electrification, falling oil demand in transport and growing pressure on global gas markets.

The relevant question is not, “Does this project make sense if the transition remains slow?”

It is, “Does it still make sense if the technologies already reshaping the market move through the steepest part of their S-curves?”

In July, the Commonwealth and Western Australian governments committed $A4 million to a pre-feasibility study for a proposed large-scale oil refinery associated with Perdaman.

The proposal was presented as a fuel-security measure. But before a refinery has even reached a feasibility stage, there are difficult questions: where would its crude oil come from, could it compete with large established refineries in Asia, how much public assistance would it need, and what will diesel demand look like as transport and mining increasingly electrify?

Funding a study is not the same as approving or building a refinery. But public funding still sends a signal. It begins to normalise the idea that Australia’s strategic future depends on building new oil-refining capacity.

That proposition deserves much closer scrutiny.

A refinery is not a short-term experiment. It needs large capital investment, a reliable supply of crude oil, skilled workers, port and transport infrastructure, a market for refined products and enough certainty to justify the investment.

By the time a refinery proposed today is fully operating, electric cars, electric trucks, battery storage and renewable-powered industrial processes are likely to be cutting demand for liquid fuels.

Fuel security matters. Australia has been uncomfortably exposed to international oil-market disruptions. But security is not only about having more fossil infrastructure. It can also mean needing less imported oil in the first place.

Electrifying transport, improving public and freight transport, expanding domestic renewable generation, building storage and strengthening electricity networks would all reduce Australia’s exposure to imported fossil fuels. They are fuel-security measures too.

The same tension is evident in the North West Shelf gas project.

Woodside received final federal approval in September 2025 to continue operating the North West Shelf gas-processing facility until 2070, subject to 48 conditions. Before that approval, the project’s operating permission was due to end in 2030.

The approval does not guarantee that the plant will operate continuously until 2070. Nor does it, by itself, approve every future gas field that might feed it. But it gives a major LNG facility a potential operating life stretching another 45 years into a world supposedly heading towards net zero by 2050.  (COP Paris commitments).

That is a very large bet on a slow transition.

It assumes that gas demand, LNG prices, export markets, regulation, finance and community acceptance will all remain favourable for decades. It assumes that lower-cost competitors will not displace Australian LNG. It assumes that electrification, energy efficiency, storage, renewable electricity and cleaner industrial alternatives will not reduce demand more quickly than expected.

Perhaps those assumptions will prove right. But they are assumptions. They should be treated as commercial and public-policy risks, rather than as fixed facts.

Faster – but fast enough?

This is where Peter’s optimism becomes important.

The global growth of renewable technologies is extraordinary. Solar is being installed at rates that would have sounded fanciful only a few years ago. Battery manufacturing is scaling rapidly.

Electric vehicles are becoming a significant part of new-car sales in major markets. Wind, solar, storage and electrification are already changing the economics of energy systems, even in countries where governments remain hesitant or conflicted.

On electricity, the story is genuinely encouraging. Renewable power can displace coal, reduce gas use and lower the long-run cost of energy services. It can also give countries such as Australia a considerable strategic advantage.

We have world-class solar and wind resources. We have space. We have engineering capacity. We have many of the minerals needed for the transition. And we have an electricity system that can increasingly run on energy resources that do not need to be imported, drilled, shipped or burned.

But “faster than expected” is not the same as “fast enough.”

The climate system runs on its own timetable. Every additional increment of warming raises risks for ecosystems, food production, water supplies, health, homes, infrastructure and social stability.

Climate tipping elements – including warm-water coral reefs, ice sheets, permafrost, major ocean circulation systems and forest ecosystems – are not a reason to abandon hope. They are a reason not to kid ourselves that gradual action is adequate.

The uncertainty cuts both ways. The energy transition could move faster than conservative forecasts assume. But climate impacts can also intensify faster than governments, companies and communities have prepared for.

That is why public policy should not hedge by extending dependence on fossil fuels. It should hedge by investing in systems that make sense under almost any plausible future: efficient buildings, electric transport, public transport, renewable electricity, transmission, storage, demand flexibility and low-emissions industry.

The opportunity we are missing

The same technology curve that creates stranded-asset risk also creates a huge opportunity for Australia.

Australia has exceptional renewable resources, extensive mineral reserves, capable engineers and a remarkable solar-research legacy. Martin Green and his colleagues at UNSW helped develop the PERC solar cell, a technology that became central to modern solar manufacturing.

We also possess many of the materials needed for a clean-energy industrial economy: bauxite for aluminium; silica for glass and silicon; copper, silver and gold for electrical systems and solar panels; lithium and other battery minerals; and iron ore for green iron and steel.

The real question is whether Australia wants to remain mainly an exporter of raw materials and fossil fuels, or whether we want to use cheap renewable electricity to make more of the high-value products the world will need.

That will not happen simply because governments announce an industry strategy. Global supply chains, labour costs, ports, finance, technology, skills and trade rules all matter. Not everything can—or should—be made in Australia.

But Australia has a credible opportunity in several areas:

– Renewable-powered processing of critical minerals and metals;

– Green iron, steel and aluminium made with low-emissions electricity;

– Battery materials, cell components, recycling and storage-system assembly;

– Grid equipment, transmission components, power electronics and renewable-energy services;

– Recovery of metals and materials from waste streams for reuse;

– Electric-transport supply chains, particularly for mining, heavy vehicles, charging and fleet systems.

These industries need more than speeches. They need abundant renewable power, transmission, storage and firming, skilled workers, industrial land, patient finance, reliable demand and policies that last longer than one election cycle.

Yet the contrast is hard to ignore. Governments are willing to put public money into investigating a new oil refinery, while Australia’s larger and more durable renewable-industrial opportunity still lacks anything like the same urgency.

A better test

Australia does not need to know the exact year when a particular fossil asset becomes uneconomic. No model can provide that certainty.

But governments can ask whether a project still makes sense in a world where the transition moves quickly.

Before approving or subsidising large fossil-fuel infrastructure, governments should require an independent stranded-asset stress test. It should examine whether a project remains commercially viable if:

– Road transport, buildings and industry electrify faster than expected;

– Renewables, batteries, transmission and demand management scale up more rapidly;

– Global demand for oil, thermal coal and LNG falls sharply;

– Carbon-border measures and climate regulation become stronger;

– Clean industrial alternatives become cheaper;

– Pollution controls, rehabilitation and decommissioning costs rise;

– Private finance, insurance and public consent become harder to secure.

If a project can survive those tests without ongoing public subsidy, it may have a place in a managed transition.

If it cannot, taxpayers should not be asked to carry the risk for a business model that depends on the clean-energy transition failing.

Peter may be right. The technological transition may be happening much faster than pessimists like me have allowed.

But if he is right, that is not an argument for building more fossil infrastructure. It is an argument for getting on with the industries, systems and policies that will still make sense once the transition really takes off.

Australia’s choice is not between optimism and pessimism. It is between investing in the accelerating future we can already see – or continuing to subsidise infrastructure designed for a fossil-fuel past that is rapidly losing its grip.