Monday, July 27, 2026

 

Has Ukraine declared war on Iran?

Has Ukraine declared war on Iran?
Ukraine has flexxed its air capabilities, but Iran also can hit Kyiv. / bne IntelliNewsFacebook
By bnm Gulf bureau July 26, 2026

The question sounds theatrical, and Kyiv would say it answers itself: no state declares war by footnote, and a single line buried in a nightly list of Russian targets is about as close to a footnote as a president gets. Volodymyr Zelenskiy's post on July 25 ran through the usual roll of what he calls long-range sanctions, a weapons plant in Kirov, a refinery in Tyumen, a depot in Rostov, and then, almost in passing, "vessels used in military cargo shipments involving Iran, as well as a warship" in the Caspian Sea. No vessel named, no flag stated, no elaboration. By the time Tehran confirmed that an Iranian commercial ship had been hit, one sailor dead and another wounded, the framing was already set. This was a strike on the Russian war machine that happened to catch an Iranian hull.

That framing is doing a great deal of work, and it is worth taking apart.

Start with what is not in dispute. Ukraine has hit targets more than 1,000 km inside Russia before and will again. Its case against the Caspian shipping lane is not fabricated: the corridor between Russian ports and the Iranian coast has carried Shahed components and, by several accounts, Fath-360 ballistic missiles north since 2022, and the two vessels Ukrainian sources named, the Port Olya 2 and the Begey, are both under Western sanctions precisely for that traffic. If Kyiv strikes a sanctioned cargo ship moving munitions to the army bombing its cities, that is a recognisable act within a recognisable war. Nobody in Kyiv thinks they picked a fight with Tehran. They think they interdicted a supply line.

But intent and effect are different things, and the effect is what Tehran now gets to define. From Iran's chair, a foreign military with which it is not at war killed an Iranian citizen aboard an Iranian-flagged commercial vessel in a sea Iran borders. Abbas Araghchi did not reach for the language of interdiction. He reached for the UN Charter, named Zelenskiy personally, and said the act was carried out "at Israel's behest to drag Europe into its war." The foreign ministry cited Article 2(4), the prohibition on the use of force against another state, and promised a proportionate response. Whatever Ukraine meant, Iran has decided to treat this as an attack on Iran.

This is the pivot the whole episode turns on, and it is where the war-declaration question stops being rhetorical. Under international law, a claim that a commercial ship carries weapons does not, by itself, license firing on it. The presumption runs the other way: merchant vessels are civilian until proven otherwise inside the rules of armed conflict, and there is no state of war between Iran and Ukraine within which those rules would even apply.

Iran was not a party to the Russo-Ukrainian war in any formal sense. It armed one side, which is a hostile act and arguably a violation of several Security Council measures, but arming a belligerent is not the same as being one. Ukraine has now used lethal force against the nationals and property of a third state outside any declared conflict between them. That is the definition of an act that generates state responsibility, and, if Tehran wants to call it one, an act of war.

Whether Iran wants to is the real question, and here the theatrics give way to cold arithmetic. Iran is five months into a war with the United States and Israel that has killed its supreme leader, closed its main export artery, and drained its military. It has no spare capacity for a second adversary, and it knows Ukraine sits behind a wall of Western support that Iran cannot afford to test.

The threats from Tehran's hardline press that "all of Ukraine is within reach" of Iranian missiles are almost certainly bluff; Iran's missile stocks are needed elsewhere, and a strike on Kyiv would hand Europe exactly the casus belli Araghchi accuses Kyiv of manufacturing. So the likelier path is the one Iran always prefers when it cannot respond in kind: summon the diplomat, file the legal protest, keep the channel open, and wait. Manouchehr Moradi has already delivered the démarche. The lawyers will follow.

The more interesting actor in all this is Russia, which Araghchi called before he called Brussels. The Caspian is a Russian lake in all but name, and a Ukrainian drone campaign that reaches Lukoil's Filanovsky platform and a Molniya missile boat is a demonstration that Moscow cannot protect its own southern waters, or its clients within them. That is a message to Tehran as much as to anyone: the protector is porous. It also tightens the knot Zelenskiy has been trying to tie all year, the linkage of his war to the Middle East one.

Kyiv has spent 2026 turning itself from a recipient of aid into an exporter of counter-drone expertise, selling Gulf states the know-how to shoot down the very Shaheds Iran designed. Striking the Iran-Russia supply line is the militarised version of the same play: proof that Ukraine's war and the Gulf's war are the same war, fought against the same weapons, and that the West should treat them as one file.

So, has Ukraine declared war on Iran? No, not in any official sense Kyiv would accept, and not in a way that will produce Iranian missiles over Ukrainian cities. But it has done something subtler and, for Tehran, more galling. It has forced Iran to absorb a lethal blow it could answer, exposed the limits of Russian protection in a sea Iran thought safe, and stapled the Iranian file to the Ukrainian one at precisely the moment Iran most needs the two kept apart.

The declaration, if it comes, will not come from Kyiv. It will come, or more likely will not come, from a Tehran doing the maths and deciding, again, that the smarter move is to swallow it. It could also mean two wars have become one. 

 

Global population growth peaked six decades ago - OWID

Global population growth peaked six decades ago - OWID
The world’s population stop growing six decades ago and is now in decline nearly everywhere, except Africa. / bne IntelliNewsFacebook
By Esteban Ortiz-Ospina for Our World in Data July 27, 2026

The increase in the world’s population is not exponential. The global population is growing, but the growth rate has declined since its peak six decades ago.

The chart shows the annual rate of global population growth according to historical estimates and projections from the UN World Population Prospects.

The growth rate peaked in 1963 at over 2% per year, and since then, it has more than halved, falling to less than 1% by 2020.

The UN demographers expect rates to continue falling until the end of the century, eventually leading to negative growth rates and a shrinking global population.

Explore how these projections change with different assumptions in our new population simulation tool

 

Kuwait signs $16bn pipeline deal with Blackstone, Brookfield and KKR despite Iran attacks

Kuwait signs $16bn pipeline deal with Blackstone, Brookfield and KKR despite Iran attacks
Kuwait refinery. / bne IntelliNewsFacebook
By Ben Aris in Berlin July 27, 2026

Kuwait Petroleum Corporation (KPC) said on July 25 that its subsidiary Kuwait Oil Company (KOC) has signed a $16bn lease-and-leaseback agreement covering its entire crude oil pipeline network with a consortium of Blackstone, Brookfield and KKR, in what it called the largest foreign direct investment in Kuwait's history.

Under the deal, dubbed Project Peregrine, a newly formed Kuwaiti joint venture will lease usage rights to all 13 of KOC's pipelines – roughly 320km of network – for a 20.5-year period in exchange for a volume-based tariff. Blackstone, Brookfield and KKR will collectively hold a 49% stake in the JV in three equal shares, while KOC retains 51% and full ownership and operational control of the network, with no restrictions imposed on Kuwait's production or refining volumes.

The transaction is expected to generate $7.85bn in upfront proceeds for KOC, funds KPC said would support its capital spending plans, including a target of 4mn barrels per day of crude production capacity by 2035 under its 2040 Strategy.

"Project Peregrine represents the largest foreign direct investment in Kuwait's history and a defining milestone for our country's economic development," said Sheikh Nawaf Saud Al-Sabah, KPC's deputy chairman and chief executive, adding it fulfils a commitment made by Kuwait's prime minister at the Kuwait Oil & Gas Show in February to attract world-class investors into strategic infrastructure "while preserving full national ownership and operational control."

KKR co-chief executives Joe Bae and Scott Nuttall said the firm had "greatly valued" its partnership with Al-Sabah's team, while Brookfield chief executive Bruce Flatt said the firm was "proud to support Kuwait as it continues to build out its vital energy infrastructure." Blackstone chairman and chief executive Stephen Schwarzman called the deal part of the firm's "nearly four-decade partnership with Kuwait." Centerview Partners, HSBC and J.P. Morgan advised KPC on the transaction, which is subject to customary closing conditions and regulatory approval.

The scale of the commitment is notable given the regional backdrop: Kuwait has come under daily attack from Iran as the wider US-Israel-Iran war continues, oil and gas analyst Giovanni Staunovo noted, with the deal signed even as the Gulf state hosts US forces that have been targeted repeatedly by Iranian drone and missile strikes. KPC called the agreement, among the first major inward investments in the Gulf since the latest round of regional tensions began, testament to "Kuwait's resilience and agility" and to continued investor confidence in the country despite the conflict raging around it.

Russia adopts AI regulations, lags behind in the race

Russia adopts AI regulations, lags behind in the race
Russia has adopted a new law aimed at regulating AI that inadvertently admits that it has made almost no progress in developing the technology so far. / bne IntelliNewsFacebook
By IntelliNews July 27, 2026

 

Russia has adopted a law aimed at regulating artificial intelligence in the country, inadvertently admitting that the country has next to nothing in the area of "sovereign AI" stipulated by the law, with almost all of its major AIs based on foreign models. Despite senior officials' claims that Russia is an important participant in the global AI race, a brief reality check shows that this is far from true.

AI law passed

Earlier this month, the State Duma, Russia's lower chamber of parliament, passed the law On Supporting the Development of Artificial Intelligence Technologies in the Russian Federation.

The law introduces two types of AI in Russia: "sovereign" and "national." In accordance with the law, a sovereign neural network is one that has been developed and deployed entirely by a Russian company that controls all stages of the process and stores data on servers within the country. Meanwhile, national neural networks are permitted to use foreign components, although only those available as open-source code.

In terms of the regulatory framework, the law doesn't offer anything groundbreaking. The ministry of digital development was appointed as the sole regulator. The labelling of AI-generated content in consumer products and the media is supposed to be voluntary. Training AI models on data from publicly available sources is not considered to be copyright infringement.

Tech industry insiders unimpressed

The Russian tech industry was largely unimpressed with the law. Natalya Kasperskaya, president of the software development company InfoWatch Group and a major lobbyist for the country's IT sector, published a scathing review of the law on her Telegram account.

"The bill suffers from being overly declarative, lacking a consistent terminology framework, delegating excessive authority to the Russian Federation Government, and fundamentally ignoring security issues," she said, adding that the legislation is effectively aimed at cementing the monopoly of two AI developers, Sberbank and Yandex.

According to Kasperskaya, the law contains no safeguards regarding AI trustworthiness and security, while it "almost entirely lacks protections for citizens' rights, including the right to privacy, the right to be informed, the right to protection from autonomous decisions made by technical systems regarding their rights and legal status, and the right to opt out of AI use."

"Adopting the bill in its current form will cement our country’s lag behind others and lead to the collapse of the domestic AI industry," Kasperskaya concludes.

Big expectations

For years, top Russian officials have been speaking about the importance of fostering the AI segment, promising support for companies using AI-based systems and those developing their own AI models.

Back in 2023, the Russian government said that the use of AI would be mandatory for all companies that plan to receive any subsidies from the federal budget, although that stipulation was never enacted. Apparently, Russian officials hoped that AI could contribute to the growth of the country's economy, which has been struggling since Russia’s invasion of Ukraine in February 2022 and the ensuing Western sanctions.

But the development of AI required substantial investment, which the Russian economy, burdened by the war in Ukraine and sanctions, could hardly afford.

Still, the government and lawmakers seem to be under the illusion that Russia is indeed a major player in the global AI race.

While presenting the recently adopted bill, Sergey Boyarsky, head of the State Duma committee on information policy, said: "There is a race not only between services, but between countries. There are three of them: China, the United States of America, and the Russian Federation."

Reality check

However, a brief glance at Russian AI models shows that most of them could hardly qualify as "sovereign" under the recently adopted law, as they rely heavily on Chinese models.

Currently, Russia has several workable AI models: GigaChat, developed by the country's largest lender, state-run Sber; Alisa AI from Yandex, "the Russian Google"; T-Pro from lender T-Bank (formerly Tinkoff); Cotype from mobile phone operator Mobile TeleSystems (MTS) and BerryLM from e-commerce giant Wildberries.

Novaya Gazeta Europe recently ran tests of Russian AIs, concluding that all of the above solutions, except for Sber's GigaChat, are built on top of Qwen, a model developed by China's Alibaba.

Incidentally, Yandex admitted the use of a Chinese AI model in its documentation, saying: "We initialized our training pipeline not with random weights, but with the weights of the Qwen-2.5-32B-base model (in AI model design, weights are numerical coefficients that determine the importance of information and in which the model’s knowledge is stored). A full training cycle for our Alice AI LLM model, initialized with Qwen3-235B weights, takes an order of magnitude less time than if we had initialized it with random weights."

The tests found that T-Bank's T-Pro 2.0 model is based on Qwen3-32B and MTS' Cotype on Qwen-2.5-32B.

Sber’s GigaChat, the only technically "sovereign" Russian AI, was "inspired" by China's DeepSeek V3, as its developers admitted, according to the Novaya Gazeta report.

However, the performance of GigaChat turned out to be inferior. Novaya Gazeta's tests showed that GigaChat was unable to correctly solve rather basic tasks.

Lagging behind in capacity and investment

The main reason why Russia has been unable to develop competitive AI models is a substantial gap in computing capacity, a shortage of AI-compatible chips, and significantly lower investment.

Capital expenditures by the four US companies involved in the AI race - Microsoft, Amazon, Alphabet and Meta - for 2026 are projected at $635bn to $665bn and could still be increased to $725bn. By comparison, the combined budget of all Russian players for purchasing AI hardware is $1.5bn to $2.5bn.

Data centre capacity is also a major factor. Just one US data centre, the xAI campus outside Memphis, is already operating at 1.3 gigawatts and is rated for 2 gigawatts. The combined capacity of all Russia’s data centres ranges from 1.2 to 1.7 gigawatts.

Meanwhile, potential investors in Russian data centres would also face electricity shortages. Even if they are able to purchase hardware abroad and bring it to Russia, they would not be able to connect new data centres to the electricity grid - at least in the Moscow region, where most companies developing AI models are based. Currently, utility companies are simply refusing to connect new data centre facilities due to a lack of capacity.

Sanctions, local production delays

Finally, sanctions imposed on Russia over the war in Ukraine are blocking local companies' access to AI-compatible chips. The A100, H100, H200, and B200 chips have been under an embargo since 2022. Gray-market imports, on which companies had relied for years, have collapsed - from thousands of servers in 2024 to just dozens in 2026, according to Novaya Gazeta.

Nvidia, a major chip manufacturer, can now determine, based on network latency, which country a chip is operating in and can block those used in Russia.

When it comes to Russia's own AI-compatible chip production, the picture is grim. Baikal AI accelerators are expected to be launched around 2029-2030, and they already lag behind Nvidia's latest products.

Technically, Russia could import some AI-compatible chips from China, but Chinese companies prioritise domestic customers, leaving Russian firms waiting in line for years.

In this situation, Russia's chances of closing the gap with the leaders in the AI race appear very slim.

Russian missiles hit Ukrainian drone-industry expo near Kyiv, killing at least 10

Facebook

By bne IntelliNews July 27, 2026

Russia carried out a daytime ballistic and cruise missile attack on Kyiv Oblast on July 24, striking among its targets a defence industry exhibition organised by Armada, an association of Ukrainian drone and unmanned systems manufacturers, according to open-source mapping account AMK Mapping. The event, a "Defence Demo Day & Defence Expo" focused on protecting critical infrastructure from aerial threats, had been advertised on social media with its time and location made public.

The exhibition site was hit by at least two Iskander-M ballistic missiles, part of a wider strike that AMK Mapping said involved roughly six Iskander-M missiles and around four Zircon hypersonic cruise missiles aimed at Kyiv and the vicinity of Vasylkiv air base.

Ukraine's State Emergency Service said rescue operations continued throughout the day at the site of the strike, according to the Military Summary account, which cited the service in reporting that ten people were killed and dozens more injured. That toll rose from the six deaths and unspecified dozens of injuries reported by AMK Mapping in the immediate aftermath of the strike, a pattern common in the early hours after such attacks as casualty figures are updated.

The strike also caused extensive damage beyond the exhibition site itself. In the nearby Bucha district, fires that broke out at three private homes and involving eight vehicles were extinguished, while a further 23 private homes, two hotels, a restaurant and 34 cars were damaged, the State Emergency Service said.

The attack is the latest in a series of Russian strikes on Ukraine's expanding domestic drone industry, which has become central to Kyiv's war effort as it seeks to offset battlefield disadvantages with locally produced unmanned systems.

Japan Eyes Foreign Banks to Back $33 Billion U.S. Natural Gas Investment

The Japanese government may approach foreign banks to help finance pledged investments in U.S. natural gas production that are part of Tokyo’s trade deal with the Trump administration, agreed last year.

“If financing from foreign banks materialises, it should further facilitate the procurement of foreign-currency funding needed to implement the investment initiative,” the Japanese finance ministry said in an X post, as quoted by Reuters.

The publication reported earlier this month that JP Morgan and other U.S. lenders were close to sealing a deal for participating in the investment initiative. According to the Japanese finance ministry, loans provided by foreign banks could be guaranteed by the country’s export credit agency, NEXI. Part of the money for the infrastructure investment projects would be provided by Japan’s state-backed Bank for International Cooperation.

The U.S. and Japan sealed a trade deal last summer, featuring a reduction in proposed tariffs—from 25% to 15%—on Japanese imports and a $550-billion Japanese investment pledge for the U.S. economy. Japan also pledged under the deal to expand market access for American goods, including cars, agricultural products, and energy.

Of the total $550 billion in pledged investments, some $33 billion will be committed to natural gas, including for the construction of the largest natural gas power plant in the world, with a capacity of 9.2 GW, according to earlier reports. The investment package will also fund the construction of a deepwater oil port in the Gulf.

“This project is expected to generate $20–30 billion annually in U.S. crude exports, secure export capacity for our refineries, and reinforce America’s position as the world’s leading energy supplier,” U.S. Commerce Secretary Howard Lutnick said at the time. The facility would have a daily capacity of 1 million barrels of crude, boosting U.S. oil export capabilities.

By Charles Kennedy for Oilprice.com

The Carbon Capture Boom Is Starting to Crack

  • Governments and major energy companies have committed billions of dollars to carbon capture projects as a way to reduce emissions from hard-to-abate industries.

  • Many CCS projects have failed to achieve their expected capture rates, while costs remain significantly higher than initially forecast.

  • Growing evidence suggests CCS may play only a limited role in decarbonization, with critics arguing that greater investment should go toward permanent low-carbon alternatives.

Carbon capture and storage (CCS) technology grew in popularity during the Covid-19 pandemic as several governments and private companies pledged to support a green transition. The use of CCS was expected to help decarbonise hard-to-abate industries until a long-term transition to clean energy could be achieved. However, in recent years, many have become more sceptical about the effectiveness of CCS technologies, as several projects have failed to perform.

CCS technology is used to capture carbon dioxide at emission sources, so it can be transported and stored or buried in a suitable underground location. Several CCS technologies have been launched in recent years, including conventional CCS installations and direct air capture (DAC) – which removes CO2 directly from the atmosphere – as they have grown in popularity, particularly across hard-to-abate industries.

As governments have put increasing pressure on industries to decarbonise their operations, companies that cannot simply switch to renewable alternatives have invested heavily in CCS activities to reduce emissions. While many have criticised companies for relying on carbon capture rather than cutting emissions at the source, CCS tech has been expected to help companies support a green transition as they assess possible long-term solutions.

In 2025, the World Economic Forum predicted that the CCS industry would grow fourfold by the end of the decade. This prediction is supported by a massive pipeline of CCS activities, as several sectors invest heavily in the technology. In the oil and gas industry, ExxonMobil, Shell, Chevron, TotalEnergies, Equinor, and Occidental have all pledged major investments in CCS technologies.

Some governments are also backing CCS in a big way. In May, Germany launched a $5.7 billion Carbon Contracts for Difference scheme that aims to promote and support CCS and carbon capture and utilisation (CCU) projects. In 2024, in the United Kingdom, the government announced up to $29 billion of funding over 25 years to make the country an early leader in two growing global sectors, CCUS and hydrogen, to be allocated between these two clusters.

Meanwhile, in Denmark, the cement maker Aalborg Portland signed a $2.55 billion CCS contract with the country’s energy agency. Aalborg Portland’s CEO Soren Holm Christensen stated, “We can now take the decisive step toward realising a project that is not only significant in a Danish context, but is also among the largest industrial CO2 capture projects in Europe.”

Despite the clear optimism around CCS technology, the cracks are starting to show as several companies fail to see the results expected from CCS operations. An Institute for Energy Economics and Financial Analysis (IEEFA) review of 13 operating CCS projects around the world found that most captured below design levels of 90 per cent, while some failed outright, highlighting the ongoing technical challenges of CCS as a solution and the potential for further cost escalation per tonne. According to the Global CCS Institute, only 50 facilities were operating worldwide in 2024, with the capacity to capture around one thousandth of global emissions.

Meanwhile, environmentalists argue that CCS is simply another form of greenwashing, and that funding for the technology could be better spent exploring alternative, clean energy options to decarbonise hard-to-abate industries. Many argue that using CCS technologies will give companies an excuse to use the “transition fuel” of natural gas for longer than necessary. In addition, CCS is being used by the oil industry to allow them to claim that they are producing “low-carbon oil”, even though burning fossil fuels continues to contribute heavily to climate change.

CCS technology is extremely expensive to incorporate into operations, with many projects relying on taxpayer support. For this purpose, key industry players suggested that CCS should only be pursued after other green solutions during a 2025 conference in London.

In the United States gas industry, the cost of adding CCS to U.S. plants is estimated at $20 to $30 per megawatt hour (MWh), which could potentially double the cost of power production. Meanwhile, in Europe, the think tanks Agora Industry and Oeko-Institut, estimate the cost of carbon capture, transport, and storage at between $170 and $340 a tonne. “According to these calculations, the costs of existing or planned CO2 storage projects are at least 50 per cent higher than previous forecasts,” the think tanks stated in a press release.

Several fossil-fuel dependent industries and companies have long promoted CCS technology as key to decarbonising operations. This has helped improve the image of CCS and allowed major oil companies and heavy industry to get government backing. However, the high cost of CCS technology use, as well as the barriers to commercial rollout, suggest that CCS promotion may have been one big (and fairly successful) PR stunt. While it may still be used in a limited capacity, governments should be encouraging companies to invest in long-term decarbonisation solutions if they hope to achieve a green transition.

By Felicity Bradstock for Oilprice.com

Australia’s Clean Energy Boom Is Gathering Speed


  • Australia continues to reduce its dependence on coal as renewable energy reaches record levels of electricity generation.

  • Investment in batteries, rooftop solar and utility-scale renewable projects is accelerating the country's energy transition.

  • Government initiatives and private-sector investment are combining to improve energy security while supporting emissions reductions.

Australia has big renewable energy ambitions and is well on its way to shifting dependence away from coal to cleaner alternatives. Having long depended on coal, the government now aims to establish a more diverse energy mix to ensure that Australia can be energy self-sufficient in the years to come, while supporting a green transition. This aim is being reflected by market forces, as energy companies invest heavily in a diverse range of energy sources.

Australia is home to an extensive ageing coal fleet, meaning the government must decide whether to double down on coal production or diversify its energy mix to enhance the country’s energy security. Black coal contributed 37.5 per cent of Australia’s electricity production in 2025, while brown coal accounted for 12.1 per cent, a significant reduction from a total contribution of around 80 per cent in 2000.

In 2024, the government launched the Renewable Energy Target (RET), a scheme that aims to cut greenhouse gas emissions in the electricity sector and increase renewable electricity generation. The RET sets a target to deliver an extra 33,000 gigawatt-hours (GWh) of electricity from renewable sources every year from 2020 to 2030.

The CEO of the Australian Energy Market Operator (AEMO), Daniel Westerman, believes that the time has come for Australia to transition away from coal to renewable alternatives. “Our old coal-fired power stations are breaking down; they’re retiring,” Westerman said. “They’re getting replaced by the least-cost energy, which is renewable energy, backed with storage, connected in with transmission. We’ll have a bit of gas there for the winter doldrums. That is just what’s happening,” he added. 

In 2023, Climate Change Minister Chris Bowen said the COP28 climate summit made it clear that “our future is in clean energy, and the age of fossil fuels will end.” This followed the signing of a deal by almost 200 states that called on all countries to transition away from fossil fuels. While the government has shown support for the transition, in Australia, the shift has mainly come from market forces rather than strict legislation or regulation.

In 2025, 42.7 per cent of Australia’s electricity generation came from renewable sources, up from 38.9 per cent in 2024. Around 15.7 per cent of this generation came from wind power, 13.9 per cent from rooftop solar energy, 7.7 per cent from utility-scale solar, and 5.3 per cent from hydropower. New renewable energy additions totalled 5.9 GW in 2025, marking a 28.3 per cent year-on-year increase.

The battery storage industry is also taking off, with a 260 per cent rise in home battery sales and a 233 per cent increase in large-scale battery capacity from 2024 to 2025, making Australia the third-largest utility-scale battery market in the world. Almost 270,000

home batteries were purchased in 2025. The creation of favourable national policies on battery storage has driven the increased uptake of recent years.

Australia contributed 10 per cent of new global battery capacity in March as the trend continues. It has been benefiting from cheaper batteries from China in recent months, following Beijing’s trade war with the United States. Australia is currently the third-largest importer of Chinese batteries after Germany and the United States, according to data from the consultancy Rystad Energy.

David Dixon, a senior analyst at Rystad, said, “Australia won’t stay at number three, but it has been going gangbusters.” He added, “We have never seen anything of this magnitude before.” Australia has surpassed 2 GWh of battery storage per million people, after what Dixon called an “unprecedented build-out”.

Rooftop solar power is extremely popular in Australia, and around four million homes produce rooftop solar, giving Australia the highest rooftop PV penetration in the world. In terms of utility solar power, 3.3 GW of new generation capacity was commissioned in 2025, of which 18 projects were utility-scale, totalling 2 GW and representing $2.7 billion in investment. In addition, the government approved seven wind projects, totalling 1.4 GW, far higher than the 775 MW commissioned in 2024.

In March, the government endorsed 16 projects with a total value of $22.1 billion in New South Wales (NSW) through its newly established Investment Delivery Authority (IDA). The IDA’s first funding round, which used a streamlined assessment process, included several renewable energy and energy security initiatives. A total of 14 energy projects valued at $24 billion were endorsed, covering pumped hydro storage, battery storage systems, wind farms, solar PV power plants, and gas infrastructure. The government hopes to accelerate future investment activities through the new IDA system.

Although Australia is playing catch-up after decades of heavy reliance on coal, the government is working hard to accelerate the deployment of renewable energy. Market forces are also supporting the green transition, as energy companies and various industries look to improve energy security and decarbonise operations, a trend that is expected to continue.

By Felicity Bradstock for Oilprice.com