A new report by the McKell Institute and Blueprint Institute reveals significant shortcomings in Australia’s energy policymaking processes, citing heavy lobbying, outdated regulatory mechanisms, and a lack of transparency as major impediments to a sustainable energy future.

The landmark report, commissioned by the Susan McKinnon Foundation, marks the first in a series assessing the quality of policymaking across key sectors.

It adopts a unique bipartisan approach, bringing together think tanks from opposite sides of the political spectrum to provide a balanced assessment of energy policy.

One of the report’s key findings is the intense lobbying activity surrounding energy policy, with a surge in lobbyist registrations over the past five years.

The report highlights an imbalance of resources, with major resource firms wielding considerable influence compared to charities, advocacy groups, and scientific organisations.

“Major resource firms with an interest in the consumption of fossil fuels have long pushed governments to moderate their climate ambitions,” said Edward Cavanough, chief executive of the McKell Institute.

“This asymmetry of resources creates a structural imbalance when it comes to the public energy debate.”

The report also points to outdated regulatory mechanisms, particularly the struggles of the Australian Energy Market Operator (AEMO) to process the growing volume of energy project applications.

AEMO, initially designed to assess proposals every five years, now faces hundreds annually.

In 2024, it approved only 14 project registrations out of 419 enquiries, demonstrating the system’s inability to adapt to the rapidly changing energy landscape.

Similarly, the National Electricity Market (NEM), designed around baseload generation, is struggling to adapt to the increasing penetration of renewable energy.

The lack of structural adaptation poses risks to the stability and efficiency of Australia’s energy system.

To address these challenges, the report recommends increasing transparency in energy policy decisions, enabling public access to the evidence and investment case behind major energy policies and projects at both state and Commonwealth levels.

It also calls for strengthened lobbying regulations.

Liana Downey, chief executive of the Blueprint Institute, emphasised the urgency of reform, stating: “Achieving Australia’s bipartisan commitment to reaching net zero by 2050 will require a seismic shift in the way energy is produced, stored and consumed.”

Downey added that the lack of bipartisan consensus has created investment uncertainty and that Australia is facing real energy supply challenges.

“If we are to meet the energy challenge and capture the exciting opportunities, we need our policymaking process to be based on the best evidence of what works and we need to keep policymaking running smoothly and transparently,” she said.

The report concludes that without greater transparency, stronger regulation of lobbying, and improved governance, Australia risks falling behind in its transition to a sustainable and stable energy future.