Australia had record renewables year in 2021, but there are clouds on horizon

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Australia’s clean energy sector achieved record growth in 2021, with the wind, solar and energy storage sectors all helping renewables reach an unprecedented 32.5 per cent electricity market share.

But investment commitments in new projects have dipped, leaving a cloud of the future growth of the sector created by ongoing federal policy uncertainty and challenges in getting projects getting connected to the grid.

The figures have been detailed in the 2022 edition of the annual Clean Energy Australia Report, published by the Clean Energy Council.

They show renewables hitting a new record peak for electricity market share of 32.5 per cent, driven by the increase in small and large scale solar, which rose to 12.4 per cent, followed by wind at 11.7 per cent and hydroelectricity at 7 per cent.

While construction activity was strong during 2021, investment decisions in new projects was lower, falling from the $4.5 billion in new investment commitments made in 2020 to $3.7 billion in 2021.

Credit: Clean Energy Council
Credit: Clean Energy Council

Clean Energy Council chief executive Kane Thornton said the figures showed 2021 was a record year for investment in clean energy projects, with rooftop solar and battery storage investment achieving particularly strong growth.

“2021 was another record year for clean energy in Australia, with almost 3 GW of new large-scale renewable energy projects completed,” Thornton said.

“The rooftop solar sector also had its fifth-straight record- breaking year, installing almost 400,000 new systems to add 3.3 GW of new capacity.”

“2021 was also a breakthrough year for big batteries, with 30 large-scale batteries under construction at the end of 2021 with a combined capacity and storage duration of 921 MW/1169 MWh.”

“Energy investors are clearly confident about the important role and commercial viability of big batteries to deliver the reliable power of the future.”

However, while the Clean Energy Council said 2021 proved to be a record year for the commissioning of new renewable energy capacity, it was concerned that the year also saw a slow down in new investment decisions on projects in the development pipeline, particularly for new large-scale renewable energy projects.

“This significant reduction is due to continued policy uncertainty combined with the challenges associated with connecting renewable energy projects to the grid,” Thornton said.

“While investors are enthusiastic about investing in new large-scale renewable energy projects, these challenges have increased risks and slowed down the number of new projects coming forward. The slowdown is concerning in light of expectations that coal-fired power plants will continue to close earlier than previously anticipated.”

According to the report, just over 35,000 people are now employed in Australia’s clean energy sector, a figure that continued to grow over the last year.

Women represented around 39 per cent of the clean energy workforce in 2021. While this figure remains below the national average, the representation of women in Australia’s clean energy sector is higher that the average for the sector globally, and higher than fossil fuel industries.

Tasmania, with its significant hydroelectric capacity, continues to be the leading jurisdiction with near 100 per cent renewable electricity market share. South Australia at 66.5 per cent and Victoria at 33.4 per cent recorded the next largest market shares, while Queensland continues to lag with just 19.6 per cent renewable electricity.

Credit: Clean Energy Council.
Credit: Clean Energy Council.

The report found that almost 3,000MW of new large-scale wind and solar projects were commissioned during 2021, along with an additional 3,300MW of rooftop solar capacity.

Tilt Renewables completed the two largest renewable energy projects commissioned in 2021, the 453MW Coopers Gap wind and the 336MW Dundonnell wind farm. Both projects are now owned by the AGL Energy led PowAR consortium.

The largest solar project commissioned in 2021 was the 275MW Darlington Point solar farm, developed by Edify.

Growth in the small scale solar sector was also strong, with a record number of new rooftop solar installations occurring in 2021 at almost 390,000. With more than 3,300MW of new rooftop solar capacity added, it was the fifth-straight year for record capacity additions.

The Clean Energy Council estimated that almost 35,000 residential battery storage systems have now been installed in Australia, with a combined storage capacity of 347MWh.

Michael Mazengarb is a climate and energy policy analyst with more than 15 years of professional experience, including as a contributor to Renew Economy. He writes at Tempests and Terawatts.
Michael Mazengarb

Michael Mazengarb is a climate and energy policy analyst with more than 15 years of professional experience, including as a contributor to Renew Economy. He writes at Tempests and Terawatts.

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