Given the recent increasing public focus on climate change issues, there is a need for robust, sustainable and climate friendly power transmission and distribution systems that are intelligent, reliable, and green. Current power systems create environmental impacts as well as contributing to global warming due to their utilization of fossil fuels, especially coal, as carbon dioxide is emitted into the atmosphere. In contrast to fossil fuels, renewable energy is starting to be used as the panacea for solving climate change or globalwarming problems. This paper describes a feasibility study undertaken to investigate the potentialities of renewable energy including the prospective locations in Australia for renewable energy generation, inparticular solar and wind energy. Initially, a hybrid model has been developed to investigate the prospects of wind energy for typical Australian region considering production cost, cost of energy, emission production and contribution from renewable energy using the Hybrid Optimization Model for Electric Renewable (HOMER), a computer model developed by the USA’s National Renewable Energy Laboratory(NREL). This model also explores suitable places around Australia for wind energy generation using statistical analysis. Subsequently, the usefulness of solar energy in the Australian context and suitable locations for solar energy generation are also investigated using a similar hybrid model. Finally, the model has been developed to investigate the prospects of renewable energy in particular wind and solar energy including specific locations in Australia that would be suitable for both wind and solar energy generation. From simulation analysis it is clearly observed that Australia has enormous potentialities for substantially increased use of renewable energy; a large penetration of renewable energy sources into the nationalpower system would reduce CO2 emissions significantly, contributing to the reduction of global warming.