The Clean Energy Investor Group (CEIG) represents domestic and global renewable energy developers and investors, with a membership accounting for approximately 18GW of renewable energy capacity in the National Electricity Market (NEM) across 139 power stations. This represents a combined portfolio value exceeding $41 billion, with a project pipeline estimated at more than 150GW across Australia. The Clean Energy Outlook 2026 report indicates that while Australia remains an attractive destination for clean energy investment, confidence is weakening across the sector.

Investor sentiment

Investment sentiment has deteriorated over the past year, with 77% of respondents stating that Australia’s clean energy investment landscape has worsened. The percentage of investors viewing Australia as an attractive destination has slipped from 69% to 58% in the last 12 months. Although international investors (who make up 73% of respondents) still value the nation’s regulatory and institutional stability, the share rating the market as ‘very attractive’ has declined significantly. Policy uncertainty remains a key concern, with changing state-level settings notably affecting investor confidence.

Challenges in renewable energy investment

Transmission buildout delays have emerged as the primary barrier to renewable energy investment, replacing planning approvals as the sector’s most significant challenge. On a scale of 10, transmission delays were rated at 7.4, followed by planning approvals at 6.8. Other critical obstacles include grid connection processes, curtailment, negative pricing, and access to grid congestion. Planning and environmental reforms, such as the Environment Protection and Biodiversity Conservation Act, have yet to translate into meaningful improvements for delivery. Furthermore, proposed changes to tax settings, specifically foreign resident capital gains tax (CGT), are perceived as damaging Australia’s competitive standing. Increasing regulatory complexity and rising construction costs are also shifting project risk earlier into the development lifecycle.

Measures to unlock greater investment

To unlock investment over the next three years, investors identified expedited transmission buildout as the highest-priority policy measure. Coal closure certainty was ranked as the second-most effective measure; while it is not viewed as the most immediate project-level constraint, it serves as a critical long-term signal for when replacement generation and firming capacity will be required. Streamlined planning and environmental permitting round out the top three priorities. Investors are increasingly seeking the faster implementation of existing reforms, such as the Electricity Services Entry Mechanism (ESEM), rather than the introduction of entirely new policy ideas.

State issues and ranking

New South Wales (NSW) remains the leading state for renewable energy investment with a score of 9.3 out of 10. Despite having the longest approval timeframes and highest development fees, its investment fundamentals are considered the strongest. Queensland retained second place with a score of 7.6, though sentiment has cooled due to energy policy uncertainty regarding the timing of coal power station exits. Western Australia (WA) was the biggest mover, rising two spots to third place (score 7.0) following the release of the South West Interconnected System Transmission Plan. Victoria slipped to fourth place (score 6.7), identified as the worst state for transmission buildout and suffering from negative pricing. South Australia (score 6.2) and Tasmania (score 3.8) occupy the final two positions, constrained by limited demand and shallow offtake markets.

2030 target

The report reveals a significant gap between Australia’s ambitions and investor confidence. Only 8% of respondents believe the nation is on track to achieve its target of 82% renewable electricity by 2030 under current settings. Conversely, 65% believe Australia will fail to meet the target, while 27% remain unsure. Closing this confidence gap will require stronger revenue certainty and the faster delivery of transmission infrastructure. Reform of the Capacity Investment Scheme (CIS) was identified as a priority to better align the scheme with final investment decisions and support genuine additional capacity.

Impact of data centres

A substantial 92% of investors view growing demand from data centres as a net benefit that could underpin the next wave of renewable generation and storage. To ensure this growth is sustainable, investors suggest policy settings should encourage data centres to source the majority of their electricity from renewable sources. Long-term power purchase agreements (PPAs) with data centre operators are seen as a mechanism to strengthen project bankability and viability, aligning with the Federal Government’s Data Centre Expectations policy.

Recommendations

The report recommends accelerating the conversion of available capital into delivered projects through the prioritisation of transmission buildout and improved grid connection processes. Efforts should be made to improve revenue certainty by providing clearer coal closure signals and deeper long-term contracting opportunities. Additionally, CEIG recommends that support for data centres be centred on additionality, ensuring that increasing demand is matched by new renewable generation and firming capacity to get the 2030 target back on track.