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Investment in renewable energy stagnates in Australia, despite its enormous potential

Investment in renewable energy stagnates in Australia, despite its enormous potential

New data from the Clean Energy Council reveals that the number of large-scale renewable energy projects committed in the second quarter of 2020 was the lowest since 2017, with just three projects representing 410 megawatts (MW) of new capacity reaching the financial close.

At $ 600 million, investment in financially committed projects was at its lowest level since 2017. Thus, investment in the second quarter of 2020 was down significantly from the historical average, down 46 percent from the previous quarter and 52 percent less than the 2019 quarterly average.

"This drop in investment reflects the growing risks that are being placed on renewable energy developers across the country," the council said.

A recent Clean Energy Council analysis revealed that the main drivers of this drop in investment relate to challenges associated with the grid connection process, unpredictable government policy interventions, and underinvestment in grid capacity. , which generates congestion and restrictions.

"Obstacles around grid connection are creating substantial challenges for renewable energy developers and, in turn, scaring clean energy investors," said Clean Energy Council Executive Director Kane Thornton.

At this time, projects are experiencing significant and often unforeseen delays in the process of connecting to the grid, which is having a major impact on the commercial terms of these projects and increasing risks for investors.

Network congestion and system-wide challenges are contributing to unforeseen changes, including technical requirements, creating uncertainty about next steps and timing for resolution for project developers.

“This weighs on the confidence for new investments in the sector, at a time when we need more investments in clean energy to boost employment and regional development and ensure that there is enough new generation before the old coal generators are retired. ”Thornton explained.

The Australian Power Market Operator (AEMO) has recognized the issues associated with connecting to the grid, and the Clean Energy Council is working closely with AEMO to improve the connection process, explore solutions and prioritize effort.

"AEMO's Integrated System Plan (ISP) 2020 has provided a clear roadmap for the development of the energy system," he said.

"To achieve this, we must address today's grid connection challenges to build investor confidence for the new generation of clean energy," he added.

“Australia has a tremendous opportunity to harness renewable energy as part of a nation-building COVID-19 economic response, creating jobs and infrastructure to support Australia's future. This requires a much needed regulatory reform, a sensible energy policy, rapid improvements in the processes of connection to the grid and investment in the backbone transmission and energy storage network ”, he concluded.

Video: The Green Recovery: how Australia can clean up its act on energy (October 2020).