AGL says still not enough policy certainty for large-scale renewables | RenewEconomy

AGL says still not enough policy certainty for large-scale renewables

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Investment in large-scale renewables face more months of stagnation after AGL says there is still not enough policy certainty to push investment, thanks to Coalition and Labor split on climate and clean energy. AGL, however, says it has doubled its rooftop solar sales, and is making its first battery storages sales to customers.

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Australia’s large-scale renewable energy industry faces more months of stagnation after AGL Energy, the biggest coal-fired generator in the country and one of the two biggest electricity retailers, says there is still not enough policy certainty to make investments in large-scale wind or solar projects.

AGL Energy CEO Andrew Vesey says the company is not ready to “pull the trigger” on any large-scale renewable energy investments because of the lack of clarity on the renewable energy target.

wind macarthurThis is despite the recent change in legislation, supported by the Coalition and Labor, to cut the RET to 33,000GWh from 41,000GWh.

“A lot more needs to be done to provide the clarity we need to pull the trigger on large-scale renewable energy investments,” Vesey told an analysts briefing on Wednesday.

“We are ready to act if good opportunities come around … but we are not close to pulling the trigger,” Vesey said.

He particularly pointed to the big differences between the Coalition and Labor on emissions targets, and how that impacted on various policies, and suggested this was unlikely to be resolved until after the Paris climate change conference.

“We want to have a target set that is around for a while,” he said. Then, the sector could deal with the mechanisms and the pathways. “I am optimistic that coming out of Paris, we will have more clarity …” he said.

Confidence in the renewable energy industry has also been hit by the Coalition’s outright rejection of Labor’s  50 per cent renewable energy target for 2050. This has been compounded by comments from Prime Minister Tony Abbott that the current target for 2020, which translates into about 23.5 per cent renewables, including rooftop solar, was “more than enough”.

Abbott and other ministers have also repeated their dislike of wind farms and have endorsed a Senate request for a “wind farm commissioner”. That Senate inquiry also wanted incentives for large-scale wind farms to be limited to just five years.

veseyVesey’s remarks support observations in the renewable energy industry that the market is still effectively at a standstill, with no new power purchase agreements being written, and no financing from banks.

The only projects going forward are those – like Coonooer Bridge and Ararat in Victoria, and Hornsdale in South Australia – which have struck long-term contracts with the ACT government, under its auction program, and projects supported by large international wind turbine manufacturers.

Vesey also said there was a need to drive older, excess coal capacity out of the market. AGL has previously pushed for government handouts to help in closure costs to coal generators, including the cost of remediation, which is estimated at more than $200 million for big generators.

“We are ready to act if good opportunities come around … but we are not close to pulling the trigger,” Vesey said.

AGL doubles rooftop solar sales, makes first batteries storage sales

On the smaller-scale side of renewable energy, AGL Energy says it has more than doubled the amount of solar PV installations in its portfolio, and expects to double it again in the current financial year, albeit from a small base.

Marc England, the head of the New Energy division, said installations had doubled to 9MW and would at least double again in 2015/16.

AGL and the other big retailers have held a tiny fraction of the solar market in Australia, with AGL and EnergyAustralia accounting for less than 1 per cent of total installations.

AGL has since launched a power purchase offering, with a unique “consumption based model” and is also pushing battery storage options, both in hybrid form with solar panels and as stand-alone installations.

England said that the “smart solar plan” as the PPA offering is known, had accounted for 10 per cent of solar sales in June, and 28 per cent in July. The offer was first made in Queensland and is now being rolled out in other states.

The battery storage market is also progressing. It had more than 2,000 people sign up to its “battery storage” club, the first five sales were being completed and another 30 were in the works.

England said AGL was using the feedback with club members and through the initial installations to gauge how consumers would use battery storage in the future. It was also pursuing deals with other battery storage companies to widen its offering and hoped to add two more suppliers to the company’s range by Christmas.

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3 Comments
  1. john 5 years ago

    The take out from the CEO is that uncertainty is the biggest obstacle to investment.

    Quote “We want to have a target set that is around for a while,”

    No prudent CEO can commit to a 20 year investment that has uncertainty factors in short 1 to 3 year time frames.
    Both major parties need to recognise that setting targets has to give certainty to business, otherwise it is pointless having some target that has no effective way of achieving it.
    So the take out can be summarised as the { politicians can have their targets but without certainty they are pointless }.

    • mick 5 years ago

      my thought is that 2000 people applied for storage package big message there

  2. Chris Fraser 5 years ago

    If Loy Yang A, Liddell and Bayswater among others suddenly didn’t exist, of course there would be lots of demand for wind and solar. The RET isn’t attractive for them, because they have to raise the capex first and get back RET costs from consumers. That’s probably a zero sum game. CEFC isn’t attractive for them, because it gives the government an equity stake in renewable projects. ARENA money isnt attractive for them, because they aren’t into developing CCS or, tidal, or geothermal. Attractive things include slowly depreciating ageing power stations, subsidised coal, grants, golden handshakes for site remediation works, basically ways to get at taxpayer money.

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