Australian businesses ramp up spending on energy shift

Australian business leaders expect to increase spending on energy-transition programmes, with many planning to commit a significant share of capital expenditure over the next five years, according to a regional study by ABB's Energy Industries division.

The Asia Pacific Energy Transition Readiness Index 2025 found that 99 per cent of Australian respondents expect to step up transition efforts within the next three years. It also found that 69 per cent plan to allocate more than 10 per cent of total capex over the next five years.

The study surveyed more than 4,000 business leaders across 10 industries and 12 Asia-Pacific markets. Respondents were responsible for areas including automation, electrification, digitalisation and sustainability strategy. The index assessed 20 indicators across strategy, technology and infrastructure, finance, and talent.

Technology drivers

Australian respondents ranked technology developments and greater use of software-driven operations as key factors in transition planning. In the survey, 68 per cent placed technological advancements among their top three drivers for accelerating the energy transition, and 51 per cent said AI and automation are significant in improving existing technologies and processes.

Many organisations also reported that they have already begun formal planning. More than half said they have core documents in place, including an energy management and transition plan (57 per cent) and a sustainability plan (52 per cent).

Confidence in data quality was another theme. About 83 per cent said they trust their technology and sustainability data, which the study linked to the ability to measure progress against internal targets.

Renewables outlook

Businesses also expect their power supply and fuel choices to shift over the medium term. The index found that 73.6 per cent of Australian respondents anticipate greater use of renewables within the next five years.

Asked about leading low-carbon sources or energy vectors, respondents cited solar PV (58.9 per cent) and wind (56.8 per cent). Hydropower followed at 46.7 per cent, with green hydrogen at 41.1 per cent and ammonia at 21.5 per cent.

The study linked these expectations to national policy settings. Australia has set a target to reduce emissions by 62 to 70 per cent by 2035, compared with 2005 levels, which the index described as providing regulatory clarity for organisations setting pathways towards net-zero goals.

The report also referenced the Renewable Energy Target scheme, which aims to add 33,000 gigawatt hours of renewable electricity each year from 2020 to 2030. Respondents' emphasis on solar and wind reflects the leading role those technologies already play in Australia's renewables build-out and development pipeline.

Workforce needs

Skills shortages and recruitment pressures also emerged. The index found that 81 per cent of Australian respondents reported a strong need for green-skilled professionals, while 49 per cent said they are actively recruiting staff with sustainability expertise.

These roles span engineering, operations, data and compliance functions across energy, resources, manufacturing, transport and infrastructure. Organisations are also responding to changing requirements in areas such as reporting, asset management and operational optimisation as power systems and industrial processes electrify.

Collaboration focus

The survey also explored how organisations are working across the energy ecosystem. It found that 61.4 per cent reported active collaboration with vendors, universities and other stakeholders. Public-private partnerships were also seen as an area with more potential, with 70 per cent identifying them among the top three untapped opportunities.

ABB said the results point to stronger coordination between industry and government as investment scales up and projects move from planning into delivery.

The report also pointed to a growing pipeline of transition initiatives in Australia, spanning grid upgrades, renewable generation, storage, electrification of industrial operations, and pilot projects for fuels such as hydrogen and ammonia. Respondents also signalled interest in technologies that improve efficiency and cut emissions from existing assets, alongside new-build projects.

"Australia's headline is momentum - with bold and diverse investment, a focus on technology and AI adoption, and private-public collaboration," said Aaron Trueman, Vice President of ABB's Energy Industries division in Australia.

"Efforts to advance the energy transition are evident among industry players through their willingness to invest across multiple transition initiatives," Trueman said. "ABB is committed to enabling reliable, affordable and sustainable progress. Now it is time to execute and deliver a brighter, cleaner future for all Australians."

The index said the next phase for many organisations will focus on execution, including technology deployment, workforce development and coordination with partners across supply chains and research institutions.