Recent data from the Clean Energy Council has revealed some encouraging signals for Australia’s energy transition.
According to the data, year-on-year investment increased by 17% from 2021 to $6.2 billion in 2022. Investment in financially committed large-scale generating and storage projects reached $4.3 billion in the fourth quarter of 2022, the biggest quarterly investment since the third quarter of 2018. Six generating and storage projects, totalling 1923 megawatts of newly installed capacity and 800 MWh of storage, have completed financial close.
In releasing the Renewable Projects Quarterly Report for Q4 2022, Clean Energy Council Chief Executive Kane Thornton stated that investors were clearly responding to a more constructive political and policy environment, with the Australian Government now demonstrating strong ambition, coordination, and policy actions.
“While the uptick is encouraging, one quarter doesn’t mean a trend. Australia is deploying new large-scale generation – wind and solar farms – more slowly than needed to reach the 82 per cent target for renewable energy on the National Electricity Market,” Thornton said.
According to Thorton, the fact remains that the rolling quarterly average investment over a 12-month period has not increased above $2 billion since the second quarter of 2019.
“The current policy settings are only going to get us so far, and it’s clear that with significant shifts in capital overseas through the United States Inflation Reduction Act and other responses from the likes of the European Union and the Gulf States, Australia needs to do more,” Thornton added.
The Australian Energy Market Operator (AEMO) highlighted the need for timely and determined effort in new renewable projects in its updated Electricity Statement of Opportunities released last month. It stated that due to the retirement of major coal-fired power plants, all mainland states in the National Electricity Market are expected to breach the reliability criterion beginning in 2027.
“Urgent and ongoing investment in renewable energy, long-duration storage and transmission is needed to reliably meet demand from Australian homes and businesses,” AEMO CEO Daniel Westerman said.
The Clean Energy Council added that the organisation believes that the Renewable Energy Goal, which has already been met, should be expanded and extended beyond its present deadline of 2030.
“We know that to truly have an effect on long-term energy prices, Australia needs the security provided by low-cost electricity direct from solar and wind and reduce our reliance on increasingly expensive gas and unreliable coal generation,” Thornton said.
