Australia Power Market Size, Share and Forecast Trends - Growth Analysis and Outlook Report (2026-2035)

The Australia power market reached USD 15.84 Billion in 2025. The market is expected to grow at a CAGR of 3.79% between 2026 and 2035, reaching almost USD 22.98 Billion by 2035.

Latest News on Australia Power Market (2026)

April 2026: Amazon Signs 430MW Renewable PPAs to Power Australian Data Centres

Amazon announced nine new renewable energy power purchase agreements on 16 April 2026 totalling 430MW across New South Wales and Victoria, its largest single-year renewable investment in Australia. Energy-Storage.news reported that eight of the projects include co-located battery storage, lifting Amazon's contracted Australian capacity to almost 1GW and supporting the company's expanding AWS data centre and AI infrastructure footprint.

March 2026: AEMO Releases 2026 Gas Statement of Opportunities for East Coast

The Australian Energy Market Operator released its 2026 Gas Statement of Opportunities on 26 March 2026, with near-term supply conditions improving as peak-day shortfall risks in southern Australia shifted by one year. AEMO cited about 30GW of battery storage under development and the delayed retirement of the Eraring Power Station as key factors softening gas-powered generation demand across the National Electricity Market.

Q1 2026 Market Updates

Geopolitical Impact of Iran, US, and Israel War on the Australia Power Market

United States: The Australia Power Market, a key segment of the global economy, is experiencing a complex operating environment in Q1 2026 as a direct consequence of the US-Israel-Iran war. Australia's wholesale diesel price rose to AUD 2.45 per litre by March 23, with fuel quality standards relaxed for diesel. Qatar LNG force majeure has disrupted Australian LNG imports, and electricity tariffs are rising. Global shipping costs are up 30% and insurance premiums have doubled or tripled, inflating the landed cost of imported goods across all sectors in Australia. QatarEnergy declared force majeure on all LNG exports after drone attacks on March 2, disrupting Australia's LNG import arrangements and pushing electricity generation costs higher. These disruptions are filtering through to input costs, logistics expenses, and consumer spending capacity in the Australia power sector.

Iran: Iran's domestic Australia Power sector has been effectively suspended by the conflict. US-Israeli strikes on industrial and civilian infrastructure across Tehran, Mashhad, Isfahan, and other major cities have disrupted all commercial activity. Power outages from attacks on electricity generation facilities have halted manufacturing operations, and the collapse of the commercial banking and logistics system has eliminated any residual trade flows. The broader humanitarian crisis, with over 1,900 casualties and 4,000+ civilian buildings damaged, has redirected the entire Iranian economy toward survival rather than production or consumption.

Israel: Israel's Australia Power sector is experiencing near-term disruption from wartime conditions. Consumer spending on non-essential categories has declined as millions of Israelis regularly shelter from missile and drone alerts. Supply chain logistics are disrupted by regional airspace closures, elevated war-risk insurance premiums, and the suspension of major carrier services through the region. International business partnerships with Israeli companies have been temporarily suspended. Post-conflict reconstruction and recovery demand is expected to provide meaningful demand acceleration across affected market segments once operational conditions normalise.

Key Takeaways

Government

• Australian energy regulators should activate strategic petroleum and LNG reserve release programmes as a bridge supply measure while the Strait of Hormuz disruption continues, stabilising industrial and consumer energy costs.
• Energy ministries should accelerate renewable energy project approvals, recognising that the Ras Tanura strike and Hormuz blockade have provided the most powerful national security case for energy diversification in decades.
• Governments should establish emergency frameworks for energy cost support to the most exposed industrial users, preventing permanent capacity closures that would compound the economic impact of the conflict.

Market

• Brent crude above USD 120 per barrel and LNG spot prices elevated by the Qatar force majeure are creating immediate input cost inflation for energy-dependent sectors while simultaneously reinforcing the investment case for all forms of energy diversification.
• The conflict has provided the most powerful real-world demonstration of the strategic vulnerability of concentrated petroleum-dependent energy systems, permanently elevating the business case for renewable energy, energy efficiency, and grid resilience investment.
• Near-term project delays from FDI caution are expected to be temporary, with the medium-term investment pipeline for energy infrastructure significantly strengthened by the conflict's strategic impact.

Procurement

• Energy procurement managers should prioritise long-term supply contract renewals for LNG and petroleum products at current price levels, ahead of further conflict escalation that could push spot prices materially higher.
• Buyers should advance renewable energy power purchase agreement negotiations, using the current energy price shock as a compelling economic and strategic business case for accelerated clean energy procurement.
• Procurement teams should build strategic energy reserves where physically and commercially feasible, using the current conflict to establish organisational resilience against future energy supply disruptions.

Market Size and Forecast

Market Size 2025: USD 15.84 Billion
Projected Market Size in 2035: USD 22.98 Billion
CAGR from 2026-2035: 3.79 %