Are Australia’s biggest states moving fast enough in transition to clean energy?

The amount of electricity produced using renewable energy sources grew by 16 per cent in 2020, led by significant increases in wind and solar output across all states and territories, but new data raises questions about whether Australia’s biggest states are moving fast enough in their transition to clean energy sources.

The latest update to the Australian Energy Statistics shows that while most Australian jurisdictions continued to attract strong investment in new wind and solar projects throughout 2020, some of Australia’s biggest states still lag behind their smaller peers – and have a lot of work to do to achieve their own ambitious energy targets.

NSW only just reached 20 per cent renewables. It doesn’t have a target as such, but knows it needs to install a lot of new renewable capacity to replace its ageing coal generators.

Victoria seems to be on track to get to its targets of 40 per cent renewables by 2025, and 50 per cent by 2030, but Queensland and the Northern Territory look well behind their targets of 50 per cent by 2030.

Western Australia also has a comparatively small share of renewables.

Tasmania, of course, has long been Australia's leader in renewable energy supply, due to the state's significant hydroelectricity resources, followed by South Australia which has been a leading investor in new wind power projects.

Tasmania continued to sit at just under 100 per cent renewables (98 per cent) in 2020, with a small amount of electricity used from the state's natural gas generator - but Tasmania was also a net exporter of electricity throughout the year.

South Australia's market share grew to 58 per cent, due mostly to new solar installations and a modest increase in wind generation. That percentage includes generation that was exported to Victoria.

The market share of renewables reached 21 per cent in New South Wales, 27 per cent in Victoria, and just 12 per cent in Western Australia.

It shows that while investment has been strong in these states, they are still a long way behind the leaders, and may not be adding new zero emissions projects at a rate fast enough to meet ambitious clean energy targets, and prepare for the exit of ageing fleets of coal and gas generators.

Coal remains the largest source of electricity in each of the three east-coast states, while most of Western Australia's generation is still supplied by gas plants, providing around 62 per cent of the state's power and coal generators supplying a further 21 per cent.

Queensland's share of renewable electricity grew from 13 to 16 per cent in 2020, which is a substantial annual increase, but raises questions about the ability of the 'sunshine' state to reach a state government target of 50 per cent renewable electricity by 2030.

It puts the state's renewable energy generation on par with the amount of electricity generated from the state's gas generators, which also sat at 16 per cent in 2020.

But while Queensland lags behind other states in terms of total market share, it is one of the fastest growing markets for new generation, particularly in the market for solar.

The amount of electricity generated from solar installations in Queensland exceeded 8,000GWh in 2020 - up from less than 2,000GWh in 2015. Queensland's wind generation has also grown considerably, despite being a relative late-bloomer compared to other states, reaching 1,365GWh in 2020, up from less than 30GWh in 2017.

Ironically, the potential closure of one of the state's coal fired generators, the Callide C plant that was effectively rendered unusable by a recent explosion at the plant, could aid in boosting the overall portion of the state's electricity that comes from renewable sources.

Annual growth was strong across most of the states, with almost all parts of Australia recording more than 20 per cent growth in renewable energy generation in 2020. The exceptions being South Australia and Tasmania, where the market share of renewables is already very high.

However, there are reasons for optimism, with strong investment likely to be forthcoming in future years, with state governments stepping in to fill a policy vacuum left by the federal government.

The federal government has no forward looking renewable energy target, with the last federal target, to reach 20 per cent renewable electricity market share by 2020, achieved and in the past.

However, the federal government has projected that Australia could reach 50 per cent renewables by 2030, thanks to ambitious policies set by state and territory governments.

The NSW government has set itself a target of adding 12GW of renewable energy capacity, along with 2GW of energy storage capacity, over the next decade, as the state prepares for the closure of much of its fleet of coal generators.

New South Wales will see the closure of the Liddell power station in 2023, removing 1,600MW of capacity from the market, along with the Vales Point power station that is scheduled to close in 2029. The Eraring and Bayswater power stations are expected to follow in 2034 and 2035, respectively.

The Victorian parliament has legislated a formal target of 50 per cent renewables by 2030, matching that of Queensland. The three eastern states will also implement a regime of 'renewable energy zones' to help coordinate investment in new network and energy storage infrastructure to support the continued investment in more wind and solar projects.

In contrast, the Morrison government has endorsed a series of energy market reforms that could provide a financial incentive for ageing coal fired generators to remain in the market, potentially delaying their closure.

See also RenewEconomy's new reference maps:

Large Scale Wind Farm Map of Australia

Large Scale Solar Farm Map of Australia

Big Battery Storage Map of Australia