The energy transition won’t move in a straight line. Why are we still talking about it as if it will?

If we reflect on the past few years of Australia’s energy transition, it is clear that the country has experienced something close to a low-level political nirvana: not consensus exactly, but enough directional alignment across governments, institutions and markets to provide a greater level of certainty for capital investment decisions.

Low-level nirvana is still nirvana. But it may not last much longer. Queensland has already shifted its tone and substance, with its Energy Roadmap focused on sweating existing coal generation assets as much as possible. Victoria’s election is bringing transmission and project pacing into sharper political contention. NSW has its own election ahead. When we look back in five to ten years, will this period feel like the high-water mark of policy alignment rather than the initial phase of a decade long period of policy consistency?

One thing does seem increasingly likely: we should not expect more of the same, or a faster version of business as usual. The next phase of the transition will include a growing number of discontinuities, step changes that alter behaviour, economics and system operations more abruptly than linear forecasts suggest. Household batteries, spurred by government financial support, are one example. What looked, not long ago, like an enthusiast’s add-on is starting to look like a system-level asset class, especially as the quantum of batteries increases so rapidly, not to mention the additional impact if virtual power plants (VPP) come into their own. That matters not only because it changes consumers’ energy economics, but because it changes the texture of the grid itself.

From a private-sector perspective, this is where the story gets genuinely interesting. Step changes create winners faster than gradual trends do. They reward businesses that position early, build optionality and, to take just one example, understand that a battery is not just a piece of hardware but a platform for value stacking, customer retention, flexibility services and entirely new commercial relationships. The old habit of treating distributed energy as peripheral to serious market strategy is becoming harder to defend. If customer-owned assets can be orchestrated at scale, then retailers, networks, developers, aggregators and investors are no longer simply participating in the transition, but are actively competing to define its operating model.

Here is the tension that matters most. Technology is helping substantially. Batteries are improving. Software is getting smarter. Forecasting is sharper. Coordination tools are more capable. In some areas, technology is helping to resolve the new coordination problems it creates. At the same time, however, the risk is rising that policy becomes less of an accelerator and more of a hindrance. Not because governments are favouring a slower transition across the board, but because political alignment is getting thinner, elections are reintroducing volatility, and the easier phase of shared alignment and commitment is giving way greater primacy for other public policy objectives.

That creates a serious strategic question for business. If technology curves are improving while policy certainty becomes more fragile, what kind of portfolio is built for that world? What becomes more valuable: scale, speed, flexibility, location, contracting ingenuity, political acumen, customer intimacy? Which businesses are set up to benefit if the transition unfolds through jagged bursts rather than smooth progression? Which are still modelling the future as a continuation of current trends with a slightly steeper slope?

This is why the standard transition debate now feels too tidy. It is still dominated by a language of targets, pipelines and eventual end states, as though the central challenge were simply to keep adding capacity until the future arrives. But capital does not invest in an end state. It invests in pathways, timing and risk. Right now, the pathway story is getting stranger. On one side, batteries are surging, rooftop and consumer energy are becoming more system-relevant, and storage is increasingly bankable as an asset class. On the other, VPPs are not following the trend of household batteries, approvals remain difficult, transmission remains contested, and policy signals across jurisdictions are no longer moving with the same rhythm.

For private-sector leaders, the implication is not to wait for clarity. It is to get better at operating without it. That means planning for discontinuity as well as continuation. It means asking where demand is headed and seriously considering what might suddenly change in customer behaviour, system value, or political feasibility. It means ensuring you have trust with the end customer to then position offerings that may allow you further control. It also means understanding that the next competitive edge may come from being able to move when the system jolts: when a technology inflects, when a government pivots, when a constraint becomes a market, or when a previously marginal capability becomes central overnight.

That is not an argument for despair. It is an argument for realism about the changing role of policy in the transition. Governments still matter enormously: in transmission, planning, market design, consumer incentives and regional legitimacy. But the assumption that policy will steadily de-risk the transition for everyone looks less safe than we may have assumed. The private sector should not read that as a reason to retreat but as a reason to become more strategically muscular, and more honest about where future value will actually be created.

So perhaps the most useful questions are not the usual ones. Not: Do we support the transition? Not: Is more technology coming? Those answers are already obvious. The better questions are harder. Are we underestimating how discontinuous the next decade could be? Are we mistaking a temporary patch of governmental alignment for a durable political settlement? Are we assuming that policy will keep making the transition easier just as technology starts to do exactly that? And if policy becomes the slower-moving variable, which businesses will still know how to win?

That is what makes this moment more than another chapter in the now-familiar transition story. It may be the point where the technology starts to behave exponentially while the politics starts to behave conditionally. If that is right, the winners will not be the organisations that wrote the neatest strategy for a linear world. They will be the ones that built enough commercial agility, operating resilience and strategic nerve to thrive in a system that moves by surges as much as by trends.