Net energy consumption

IBISWorld forecasts net energy consumption to decrease marginally by 0.6% in 2024-25, to reach 5991.5 petajoules of consumption. The ongoing focus on improving energy efficiency in manufacturing processes is set to drive a contraction in the amount of energy consumed by the manufacturing sector. Electricity consumption in the National Electricity Market is also expected to fall marginally over the course of the year. The contribution of renewable electricity generation to the NEM grid has also increased by over 3.5 percentage points through May 2025, placing downwards pressure on net energy consumption in electricity generation processes. However, growth in the number of Australian households, driven by continued population growth, is expected to put upwards pressure on residential energy consumption, limiting the overall decline.

The pandemic had a mixed, but overall negative, effect on net energy consumption. Lockdown measures and a slowdown in economic activity decreased businesses energy consumption. However, work-from-home requirements led to increased household consumption, which partially offset this decline. International border closures also contributed to a significant decline in net energy consumption by airlines, as energy consumption from aviation fuel plummeted, driving overall declines in net energy consumption in 2019-20 and 2020-21. Manufacturing and utilities firms continued their medium-term downward trend due to declines in manufacturing activity and a shift to renewables by the electricity sector.

The utilities, transport and manufacturing sectors have consistently accounted for almost 70% of Australian energy consumption over the past five years. In 2022-23, energy consumption by the utilities sector accounted for 23.8% of total energy consumption, including fuel inputs for electricity generators. The transport sector also accounted for 27.6% of energy consumption, most of which was captured by aviation fuels. Manufacturing accounted for 16.9%, a 0.9 percentage point decrease on its share in 2021-22. The manufacturing and utilities sectors have decreased their net energy consumption over the past five years, due to greater energy efficiency among manufacturing processes and a shift towards renewable energy and non-grid electricity generation from rooftop solar panel installations, reducing reliance on fossil fuel energy consumption for electricity grid supply. However, the transport sector's net energy consumption has expanded since 2019-20 when the aviation industry's consumption declined significantly due to the lack of travel during the pandemic. Overall, net energy consumption is forecast to decline at a compound annual rate of less than 0.1% over the five years through 2024-25.