ABU DHABI: Australia has chosen not to send any government representatives to the first major post Paris climate change conference, as new data confirms how the Coalition government has effectively killed the renewable energy target as an effective policy mechanism.
In 2015, the world invested a record $US329 billion in renewable energy. But in Australia, the RET – the country’s primary policy mechanism – has attracted just $15 million in investment in nearly two years.
The data, from Bloomberg New Energy Finance, confirms that since the Abbott government announced its review into the RET in early 2014, the scheme has been at a standstill.
That remains the case – even though renewable energy certificates have jumped to record levels of $74/MWh – because utilities and financiers refuse to sign contracts, due to the lack of policy certainty and because they believe that the Coalition could change the target again.
Indeed, more than half Australia’s investment in renewable energy in 2015 (of $A4.1 billion) comes from households and businesses, who spent $2.2 billion in 2015 adding rooftop solar PV to their home and commercial premises.
There has also been some $1.1 billion of large scale asset finance in 2015, but this due to activities outside of the Coalition’s control. Much of it was provided by the ACT government, and its successful reverse tender for large scale wind and solar.
The rest came from projects supported by two agencies that the Coalition government has tried to dismantle. Legislation calling for the Clean Energy Finance Corporation and the Australian Renewable Energy Agency has not been withdrawn, despite the Coalition’s stated contention that “we like renewables.”
That declared support does not extend to sending ministerial, or even department level representatives to the International Renewable Energy Agency (IRENA) summit in Abu Dhabi this week.
While 58 countries are sending their energy, environment or other senior ministers including France, Germany, and India, Australia is sending only staff from the local embassy. Under Labor, Australia was a co-chair of IRENA and sent its energy minister.
The summit is the first to be held since 195 countries, including Australia, signed on to an ambitious goal to limit global warming to “well below” 2C, and even to aim to cap the rise at 1.5C.
That will require dramatic action at a scale not seen before. IRENA, the hosts, says the summit will discuss the road from Paris, the energy transition from fossil fuels to renewables and the transformation of the power sector.
The summit is also attracting more than 1,000 delegates from more than 150 countried. It will be followed by the World Future Energy summit, featuring leading financiers and renewable energy companies and utilities, and some 30,000 delegates. But again, no Australians.
BNEF said that clean energy investment in Australia is languishing at levels not seen since the RET was expanded in 2010.
Even with the ACT government program, and the initiatives supported by ARENA and the CEFC, Australia ranks just 18th in the world and trails countries such as Belgium (17th, $US870m), Thailand (15th, $US1.05 billion) and Morocco (12th, $US2.02 billion).
BNEF says Australia needs at least $A3.6 billion in large scale investment each year to reach even the scaled back renewable target of 33,000GWh.
BNEF’s bleak assessment of Australia’s large scale investment contrasts with the surge in investment in China, Africa, the US, Latin America and India in 2015.
This surge was despite further declines in the cost of solar photovoltaics, meaning that more capacity could be installed for the same price; the strength of the US currency, reducing the dollar value of non-dollar investment; the continued weakness of the European economy, formerly the powerhouse of renewable energy investment; and perhaps most significantly, the plunge in fossil fuel commodity prices.
Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance, said: “These figures are a stunning riposte to all those who expected clean energy investment to stall on falling oil and gas prices.” Said Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance.
“Wind and solar power are now being adopted in many developing countries as a natural and substantial part of the generation mix: they can be produced more cheaply than often high wholesale power prices; they reduce a country’s exposure to expected future fossil fuel prices; and above all they can be built very quickly to meet unfulfilled demand for electricity.
“And it is very hard to see these trends going backwards, in the light of December’s Paris Climate Agreement.”
The biggest projects financed last year included a string of large offshore wind arrays in the North Sea and off the coast of China. These included the UK’s 580MW Race Bank and 336MW Galloper, with estimated costs of $US2.9 billion and $US2.3 billion respectively, Germany’s 402MW Veja Mate, at $US2.1 billion, and China’s Longyuan Haian Jiangjiasha and Datang & Jiangsu Binhai, each of 300MW and $US850 million.
After asset finance, the next largest piece of clean energy investment was spending on rooftop and other small-scale solar projects. This totalled $US67.4 billion in 2015, up 12 per cent on the previous year, with Japan by far the biggest market, followed by the US and China.
Australia was however the 5th largest investor in small-scale PV in 2015 – spending $A2.17 billion – placing it ahead of Germany (6th,) but behind the UK (4th) and Japan (1st, $US31.67 billion).
