Written

For

The

Australian

-

Where

to

invest

as

the

heat

rises

on

Australia’s

power

generation

capacity

El Nino is here, the airconditioners are cranking, and our ageing coal-fired power stations are being asked to do the impossible. Add to that the surge in electric vehicles plugging into the grid, and it's no wonder energy experts are warning of blackouts this summer.

Whether you're a climate warrior or a sceptic, the reality is that Australia is committed to an energy transition. Chris Bowen wants renewables to jump from 35 per cent to 82 per cent of electricity generation by 2030. That's a huge lift, particularly when you consider NSW, Victoria and Queensland still get around 60 per cent of their power from coal. Tasmania, meanwhile, has zero coal-fired power stations thanks to its hydro network, and South Australia leads the pack on renewables at 70 per cent.

For investors, this is a decade-long theme worth paying attention to. My take? Don't ignore uranium, even though Australia won't touch nuclear power. France runs on it, China is building 21 reactors, and the US has 93 already operating. Betashares' URNM ETF gives exposure to global uranium miners including Paladin and Cameco.

On the renewables side, there are a few interesting plays. VanEck's CLNE ETF offers diversified exposure across solar, wind, hydro, geothermal and biomass. If you want a purer bet, Betashares' TANN focuses on solar, and Global X's HGEN plays the hydrogen theme.

And here's one many investors overlook — carbon credits. If clean energy targets are missed, don't be surprised to see a Gillard-style carbon tax make a comeback. VanEck's XCO2 ETF provides exposure to carbon credit price movements, which could benefit as regulation tightens.

None of these are "must buy today" investments. But as a long-term thematic sitting alongside a diversified portfolio, they're worth a look. The energy transition is happening — the only real question is how bumpy the ride gets.