The Clean Energy Council (CEC) has warned said new investment in renewable energy projects such as solar and wind farms has plunged to levels not seen since former conservative Liberal-Nations leader Tony Abbott was Prime Minister, risking power price rises and future energy reliability.
While the current government of Prime Minister Scott Morrison has been trumpeting record recent investment in renewable energy to rebut persistent arguments the Liberal-National government lacks ambition on climate policy, the CEC warns the positive trend is in danger of abrupt reversal because of the ongoing lack of policy certainty.
CEC Chief Executive Kane Thornton said following the good news last week that the 2020 large-scale Renewable Energy Target (RET) would be met, there is currently no energy and climate policy to replace it, giving pause to many major investors.
The CEC today released a new policy briefing paper, which shows quarterly financial commitments in new renewable energy projects reached a high of over 4500MW in late 2018, but have since collapsed to less than 800MW in each of the first two quarters of 2019.
“Investors have been forced to balance their record enthusiasm for Australian wind and solar projects with a lack of national policy, growing threats of government interference in the energy market and a range of out-of-date regulations,” Mr Thornton said.
“With Australia’s coal-fired power stations ageing rapidly, it is essential new clean energy projects are built now to ensure lower power prices and improved reliability when these old clunkers retire from service.”
The analysis in Australia’s clean energy generation investment outlook finds that while large-scale renewable energy no longer needs subsidies, long-term policy certainty and regulatory reform are crucial to giving confidence to investors.
The report says the large-scale RET, which winds down after 2020, led to 15,700MW of new capacity being financially committed over the past two years, with that generation either under construction or recently commissioned.
Its release comes as dozens of the clean energy industry’s senior executives are at Parliament House in Canberra today for an evening reception with politicians and policymakers, which follows a forum to consider the end of the RET and what comes next.
Mr Thornton said that large-scale renewable energy was confronting a range of regulatory barriers, as a result of an energy grid and set of rules that were no longer fit-for-purpose.
“The industry is working closely with the Australian Energy Market Operator (AEMO) and the networks to address many of these issues in the short term.
“However, a lot of the problems we are seeing now are symptoms of the underlying issues, the need for strategic investment in the electricity network to service the best zones for renewable energy across the country and unlock more cheap, clean power,” he said.
“There is no excuse for a slow-down in investment in renewable energy as the industry begins unlocking the enormous potential of energy storage across Australia, effectively complementing renewable energy projects.”
More than 500MW of large-scale battery projects have already been financially committed, along with more than 9000MW of pumped hydro potential which has been identified.
“This demonstrates that there is no shortage of potential from energy storage to support the continued deployment of variable renewable energy projects and to meet peak power load as ageing coal-fired power stations exit the system,” Mr Thornton said.
“However investment in energy storage is challenging without market reform and clear policy that can reduce uncertainty and recognise the value that these projects provide to the energy system and market.”
A more detailed summary of the current state and future outlook for investment in renewable energy and energy storage can be found in the briefing paper Australia’s clean energy investment outlook, which is available on the Clean Energy Council website.
The document includes a set of recommendations for ensuring continued investment.
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