Political Hurdles Trip Up Next Age of Infrastructure Megaprojects

Australia is at a crossroads in its infrastructure journey, shifting from years of huge investment in roads and railways towards utilities, particularly electricity and water. Economists and industry experts forecast this switch as the next big thing, but the transition is facing political uncertainty. The Federal Government has revealed a list of renewable energy projects of national significance that will benefit from an accelerated environmental approvals process. More than 16gW of solar and wind generation and about 6gW of energy-storage projects could be fast-tracked as the country works towards achieving 82 per cent renewable electricity by 2030. This transition faces fresh challenges as new analysis warns that the Coalition’s nuclear power policy could halt $58 billion in renewable energy projects. According to research by Green Energy Markets for the Clean Energy Council [CEC], limiting renewable energy to 54 per cent of total use—as implied in the Coalition’s policy modelling—would prevent nearly 29gW of new large-scale solar and wind farms. Oxford Economics head of global construction forecasting Nicholas Fearnley says the transition from transport to utilities infrastructure will reshape Australia’s economic future. “The big growth area that’s coming up is utility,” Fearnley says. “Transportation infrastructure activity is expected to peak this year, will remain stable and then fall before the end of the decade. Whereas, with the utility space, we’ve got electricity growing out, and water more of a long-track story.” ▲ Oxford Economics head of global construction forecasting Nicholas Fearnley. As major transport projects wind down, there’s potential for a skills exodus unless the ramp-up in utilities projects is carefully sequenced. Oxford Economics head of construction and infrastructure consulting Adrian Hart warns that “the skills between both [sectors] are not exactly transferable”, creating concerns about capacity to deliver on renewable targets. “We’re going to need a lot more skills if we’re to deliver the kind of construction output that we’re forecasting ... and we need to think of more productive ways of delivering it,” Hart says. The stakes are high, according to CEC analysis, which shows that renewable developments potentially shelved under a Coalition government would lead to a loss of 37,700 full-time-equivalent construction jobs and 5000 ongoing jobs. CEC chief executive Kane Thornton said the Coalition’s position would cost “real dollars for farmers, real dollars for country towns and real blue-collar jobs that pay Australians’ bills”. The Department of Climate Change, Energy, the Environment and Water says its Priority List “adopts a ‘faster to yes, faster to no’ approach” while maintaining that projects “will still have the same scrutiny applied as any other project”. The inaugural Priority List—restricted to projects of more than 30mW and scheduled for completion by December 31, 2031—includes 32 renewable-energy-generation and storage projects. If approved, these could deliver an additional 16.5gW of generation and 6.3gW of storage capacity. The list also includes 24 key transmission projects to support the integration of renewables into the grid, backed by $134.2 million in federal funding. ▲ Loy Yang Power Station, a brown coal-fired thermal power station near Traralgon in south-eastern Victoria. The Coalition has said it would cover any energy gap by extending the life of coal-fired power plants and using more gas until it could build taxpayer-owned nuclear plants, mostly after 2040. It has also indicated it would scrap Labor’s $20-billion fund to build transmission links. Labor counters that the Coalition’s nuclear policy could lead to blackouts due to reliance on ageing coal plants, potentially costing the economy billions. Energy department advice shows that, on average, 22 per cent of the country’s coal-fired capacity was unavailable last year due to shutdowns or reduced operations. “We’ve got significant investment happening in transmission networks that can better connect the states but also open up renewable energy zones,” Fearnley says. Among renewable technologies, he predicts that “the fastest-growing sector over the next five years in the electricity market will remain wind farms”. Despite ongoing debates about nuclear power, Fearnley sees little immediate prospect for it in Australia. “Given the rate which we’re decarbonising the grid, there’s no pressing need to have a nuclear power plan … by the time it’s all built we would have already been well on the way to decarbonising the grid.” ▲ Construction under way on part of the Snowy Hydro 2.0 project at Tantangara Dam in the NSW Alps. Major electricity projects driving this transition include Snowy Hydro 2.0 in NSW, despite the project facing tunnelling challenges. “[But] we don’t think the tunnelling machine is going to keep getting stuck,” Fearnley says. “The next tunnels they’re building are going to be narrower and less expensive.” After this is completed, Queensland is expected to take the lead in infrastructure development, already positioning itself as a “renewable energy superpower” in its 20-year State Infrastructure Strategy. The nation’s water infrastructure needs are pressing, Fearnley says, facing multiple demands beyond human consumption. “It’s essential for hydroelectric storage, hydrogen production, and agricultural needs,” Fearnley says. “If Australia doesn’t build more water infrastructure soon, we’re going to run out of water in the 2030s or 2040s.” Fearnley says the need for water is greater in high-growth regions in states including Queensland and NSW. Unlike urban transportation projects, many renewable energy developments and water projects are in regional areas, further complicating this utilities transition. “We talk about labour shortage in the city, it’s much harder to get people to go to a regional area and to go and work there,” Fearnley says. “It’s one of the challenges that we’re working with clients to address—how to actually go and build projects in these regional areas.” Victoria appears particularly vulnerable to the infrastructure transition. Having led major road and rail projects for years, the state faces a substantial decline in transportation infrastructure activity without an obvious pipeline of next-phase projects, Hart says. ▲ Victoria’s Rail Crossing Removal project and Big Build projects will soon come to an end, Hart says. Meanwhile, Western Australia and Queensland are positioned for stronger growth, fuelled by mining investment and population growth. Overall, engineering construction activity is expected to continue its strong growth trajectory, with private sector investment increasingly driving this growth. “The Government invested a lot of money in transportation infrastructure as we reached peak activity, and we’re going to have a peak in government funding in the engineering construction market. “But we’ll soon see private sector investment continuing these projects on its own,” Fearnley says. For construction firms and workers, this transition represents a challenge and an opportunity. Companies that can pivot from transportation to utilities infrastructure, particularly in renewable energy and water, will find substantial growth potential. Australia’s infrastructure transition is more than an industry shift—it’s a fundamental realignment of national priorities, Fearnley says. How successfully the country navigates this transition and the political debate surrounding it will shape its economic and environmental prospects for decades to come. “We need to be able to innovate,” Fearnley says. “That is ultimately how we’re going to get productivity—we need to get people interested in taking risk.”

Political Hurdles Trip Up Next Age of Infrastructure Megaprojects

Get the full story.

Prefab, Modular, Ready-to-Go: Construction Innovation Evolves

High-Stakes Bid to Shape Adelaide’s Next Urban Precinct

Modular Hotel Rises on Queenstown’s Steepest Site

No Template, No Shortcuts: Divya Mehta on Leadership and Scale

Old Buildings, New Appeal: Heritage Office Interest is Surging in Brisbane

Melbourne Long Lunch | Panel discussion with Tim Price, Jeremy McLeod, Katya Crema & Anne Michaels

A fireside chat with Troy Daffy | Managing Director, Silverstone Developments

Brisbane Long Lunch | Panel discussion with Rob Comiskey, Frank Licastro, Steve Laffey & Alexandra Stuart-Robertson

Sydney Long Lunch | Panel discussion with Jamie Durie, Jennifer Macquarie & Michael Romano

The Developers Who Led the Way for BtR in 2025

Greenfield Developer ID_Corp Plots $1.4bn Land Lease Play

Prefab, Modular, Ready-to-Go: Construction Innovation Evolves

Property Predictions: Nine Trends That Will Shape 2026

2026 Developer Outlook Lunch | Melbourne

2026 Developer Outlook Lunch | Brisbane

2026 Developer Outlook Lunch | Sydney