“These are major handbrakes on new clean energy development.”
The Clean Energy Investor Group, representing investors holding $9 billion across 49 renewable energy assets nationwide, intends to ramp up advocacy for a redesign of the energy market to encourage the flow of lowest-cost capital and achieve goals of the energy transition at the lowest cost to consumers and taxpayers.
Federal Energy and Emissions Reduction Minister Angus Taylor said statistics from the Clean Energy Regulator, showing 837 megawatts of new large-scale renewable energy capacity had reached financial close in the first half of 2020, dispelled any “myths” that investment in Australia was falling away.
Mr Taylor said between 2 and 3 gigawatts of large-scale renewable energy projects were expected to achieve financial close across 2020 – six times the average yearly capacity prior to 2017 – signalling “confidence in the sector despite the economic challenges of COVID-19”.
“Australia is a world leader in renewable energy,” Mr Taylor said. “This dispels the myths that some continue to spread around a stall in investment.”
Coal and gas-fired generation remain the dominant sources of Australia’s energy supply, together accounting for 77 per cent. But a surge in investments has driven projections that wind, solar and hydro power could increase to as much as 30 per cent of the mix by 2021. Some projections say renewables’ share could reach nearly 30 per cent by the end of 2021, while the Australian Energy Market Operator (AEMO) says the system could safely accommodate up to 75 per cent renewable energy by 2025, provided that market conditions and regulations were modified.
If no action was taken to address existing region-specific and grid-wide technical challenges, AEMO said it would need to restrict power from wind and solar to between 50-60 per cent of overall supply at any point in time.
Mr Taylor on Thursday said the increase of renewable energy across the network brought with it “reliability challenges” due to wind and solar farms’ inability to produce power on overcast and still days compared to fossil fuels.
He said the government was seeking to address those challenges with a $1 billion “grid reliability fund”, which is considering backing several projects, including pumped hydro, gas and renewable generation to ensure stability of energy supply across the grid.
Mr Corbell said investors were urging the Morrison government to focus more of its efforts around ensuring not only the reliability of the National Electricity Market (NEM), but also a clear pathway for a higher level of integration of renewables.
“While the federal government is focusing on short-term issues around grid reliability, it has not yet chartered out a long-term plan for how to increase and manage the increase of integration of renewables to the NEM,” he said. “And that’s critically important to achieving a clean energy future and reducing Australia’s greenhouse gas emissions accordingly.”
Business reporter for The Age and Sydney Morning Herald.