Australia in midst of $20 billion wind and solar investment boom

The Coalition government tried to prevent it and failed, and haven’t stopped complaining about it ever since. And now we can see why: Australia is in the midst of an extraordinary investment boom in large scale wind and solar projects, and battery storage, far beyond what  even the industry’s most ardent supporters ever imagined.

The latest estimates from the Clean Energy Council show that there is currently $20 billion of wind and solar farms either under construction or about to start because they have reached financial close.

This represents some 80 wind and solar farms with some 14.6 gigawatts of capacity – far beyond that which is required under the mandated renewable energy target, which the Coalition tried to scrap under the Abbott government but only got as far as reducing its target from 41,000GWh to 33,000GWh.

The large scale RET is not the only mechanism out there providing an incentive for new investment – state based schemes targets exist in Victoria and Queensland,  and state governments and private companies are also contracting directly with wind and solar projects to secure a cheaper source of supply.

And, it should be pointed out, this does not include the $6 billion of wind and solar projects already completed, means that the total value of wind, solar and storage projects completed or underway this year is more than $26 billion. A further $2 billion is likely to have been spent on small scale rooftop solar in 2018.

Clean Energy Council Chief Executive Kane Thornton said 2018 was unquestionably a record year for the industry. More than 2 million homes now have solar panels, and over 80 wind and solar farms are now under constructed or about to start, he said.

“The total value of the projects underway is double where we were at the end of last year,” Clean Energy Council CEO Kane Thornton said in a statement accompanying the report.

“More than 80 projects are being built which will deliver over $20 billion of investment and 13,000 direct jobs. It really is an amazing time for this industry.

“The skills and experience our industry has developed this decade allow new projects to be built more efficiently than ever before, helping to push down projects costs and power prices.

“Along with the incentives provided by the Renewable Energy Target (RET) and state policies, wind, solar and storage have created an extraordinary opportunity for thousands of people in regional parts of the country.”

Queensland leads the way with $6.9 billion of investment, some 5,640 of new capacity and more than 4,500 direct jobs, it’s followed by Victoria with $5.2 billion and 3,400MW of capacity and 3,800 direct jobs. NSW has $4.3 billion of investment, more than 2100 direct jobs and 3500MW of capacity under construction.

The question for the industry now is that what happens next. The renewable energy target is already easily met, and there is currently no policy in place to guide future investment. And this lack of policy certainty could slow new projects, even though they do not require a subsidy.

“While new investment no longer requires subsidy, it does require long-term energy policy certainty. As the year closes, we are no closer to national, bipartisan energy and climate policy. If anything we are further away than when we started,” Thornton said.

The Coalition government has no policy for either climate or energy, threatening only to impose a series of government interventions in the workings of the energy market, including the forced divestment of coal-fired generators that their owners want to close, such as the Liddell coal generator in NSW.

The Coalition had sought to introduce a National Energy Guarantee, comprising of emissions and reliability obligations. But the emissions component of a 26 per cent cut in emissions by 2030 – even though it would have been largely met before it was put in place – was abandoned by the Coalition under the weight of its Far Right MPs.

Labor has promised to try to resurrect the NEG, on the condition it includes a 45 per cent emissions reduction target, and proposes a 50 per cent renewable energy target by 2030. This, however, would likely see less investment in new wind and solar over the next decade than occurred this year.

Pending the outcome of the next federal election, which will likely be held in mid May, if not in early March, that leaves only states and territories with individual targets.

The newly re-elected Victorian government has a 40 per cent target by 2025, rising to 50 per cent by 2030, and the Queensland and Northern Territory Labor governments also have a 50 per cent renewable energy target by 2030. The ACT’s 100 per cent target will be met through investments already made, as will Tasmania’s target.

That leaves NSW, where neither major party has a renewable energy target, but both recognise that the state will have to make huge investments in wind, solar and storage to replace the ageing fleet of coal generators that are due to retire over the next 15 years. More policy announcements may be made before the March election.

Western Australia is also making noises about finally introducing a long-term climate policy and target, which may include a renewables component. South Australia is already beyond the previous Labor government’s 50 per cent renewable energy target by 2025, and the pace of investments in that state could see it supplying near 100 per cent of its local demand within a decade.