Queensland has formally rejected key national electricity market reforms and committed AUD$1.6 billion to bolster its ageing coal-fired power stations, a move that significantly diverges from Australia’s broader clean energy transition. The decision, made at the Energy and Climate Change Ministerial Council (ECMC) meeting on May 11, 2026, highlights a growing policy chasm within the National Electricity Market (NEM) and poses a direct challenge to the federal government’s target of 82% renewable energy by 2030.
The Queensland LNP government, led by Premier David Crisafulli, has explicitly withdrawn its support for the Electricity Services Entry Mechanism (ESEM), a critical reform emerging from the National Electricity Market Review. This mechanism is designed to facilitate a more orderly and efficient transition to a renewables-based energy system across the NEM.
Since coming to power in late 2024, the Crisafulli government has dismantled the state’s previous renewable energy targets of 50% by 2030 and 80% by 2035. Concurrently, it has committed a substantial AUD$1.6 billion to extend the life and operations of its existing coal fleet. This is further compounded by the introduction of stringent new planning regulations for large-scale wind, solar, and battery projects, while simultaneously seeking to fast-track oil and gas developments.
“The state is now ‘going backwards’ on renewables, because of the stop on so many new projects.” — Former Labor state energy minister Mick de Brenni, May 2026.
This policy shift by Queensland runs counter to the coordinated efforts of other NEM jurisdictions, including New South Wales, Victoria, and South Australia, which have agreed to progress a legislative package implementing the recommendations of the independent NEM Wholesale Market Settings Review Panel. These reforms aim to support greater participation by smaller-scale and distributed energy resources (DER) in wholesale electricity markets.
The implications of Queensland’s stance are far-reaching. The federal government’s ambitious 82% renewable electricity target by 2030, and a 62% to 70% reduction in emissions below 2005 levels by 2035, rely heavily on a unified national approach to energy policy and investment. Queensland’s disengagement from key national reforms, coupled with its investment in fossil fuels, introduces significant uncertainty into the national energy landscape.
Investment certainty for renewable energy projects, particularly those requiring cross-border transmission or integrated market mechanisms, could be impacted. While other states are actively pursuing electrification and renewable generation, Queensland’s actions risk isolating its energy market and potentially increasing its reliance on higher-cost, emissions-intensive generation in the long term. Households and businesses in Queensland, already navigating complex energy markets, may face different trajectories compared to their counterparts in other states. For guidance on navigating these market shifts, see our guide on the Best Electricity Plans in Australia 2026: A Comprehensive Guide for Households to Cut Costs.
The former Labor state energy minister, Mick de Brenni, speaking in Sydney last week, criticised the current Queensland government’s approach, stating the state is now “going backwards” on renewables due to the halt on numerous new projects. This sentiment underscores the deep ideological divide emerging within Australian energy policy.
While the federal government continues to champion initiatives like the expanded Capacity Investment Scheme (CIS) and the establishment of a Consumer Energy Resources (CER) National Technical Regulator to integrate distributed resources like rooftop solar, batteries, and electric vehicles, Queensland’s position presents a substantial hurdle to national harmonisation. The national push towards home electrification, detailed in guides such as Ditch Gas & Save $1,000+ Annually: Your 2026 Australian Home Electrification Guide, may also face different incentives and regulatory environments in Queensland.
The ongoing commitment to coal-fired generation in Queensland contrasts sharply with the broader trend of coal plant retirements across the NEM, which is leading to a structural shift in how power prices are set. AEMO’s Q1 2026 Quarterly Energy Dynamics report, released in late April, highlighted that batteries are now the most frequent price-setting technology across the NEM, displacing hydro and accounting for 32% of all price-setting intervals. This fundamental shift underscores the growing dominance of renewables and storage in shaping wholesale electricity costs.
As the NEM continues its rapid transformation, the policy choices made by individual states will have increasingly significant impacts on the overall grid stability, investment landscape, and ultimately, the energy bills of Australians. The divergence seen in Queensland marks a critical juncture in Australia’s path to a cleaner, more secure energy future.