Australian renewable investment plunges to near zero, but rooftop solar grows

The crisis affecting investment in large-scale renewable energy projects in Australia has deepened, with new analysis by Bloomberg New Energy Finance pointing to a 90 per cent drop in the 12 months to March 31, thanks to policy uncertainty under the Abbott government.

The BNEF data shows new investment Australian large-scale renewable energy projects tumbled in the 12 months to March 31 was just $206.9 million – a fall of 90 per cent – and only one large scale renewable energy project (worth $6.6 million) was financed in the first quarter.

But the data hides an even worse story. Of that $206.9 million, $160 million came from government agencies – such as the Australian Renewable Energy Agency and the Clean Energy Finance Corporation – that the Coalition government is trying to scrap. Without that support, investment would have been virtually zero. The one project to get financed in the latest quarter was for a unique floating solar pilot project in South Australia.

BNEF says the dramatic drop is almost entirely due to the policy uncertainty brought about by the election of the Abbott Coalition government, and attempts by key members to firstly scrap, and now severely cut the previously bipartisan target of 41,000GWh by 2020.

The Clean Energy Council, supported by Labor and key industry groups, has proposed a compromise of 33,500GWh, but so far the Abbott government has refused to budge from its position of 32,000GWh. Industry minister Ian Macfarlane has indicated that even that figure is too high for many in Cabinet.

The BNEF data shows new investment Australian large-scale renewable energy projects tumbled in the 12 months to March 31 was just $206.9 million – a fall of 90 per cent – and only one large scale renewable energy project (worth $6.6 million) was financed in the first quarter.

This followed zero investment in large scale projects in the previous quarter. BNEF noted the exit of Banco Santander, the world’s third largest clean energy lender, from the Australian market, as reported by RenewEconomy here.

In contrast, the uptake of rooftop PV by households and businesses has been largely unaffected, with about 195MW of  rooftop PV capacity in the sub-100kW category installed in the first quarter, a 7 per cent increase on the same quarter a year ago.

The data came as new figures from the Australian Bureau of Statistics on Monday showed the number of renewable energy jobs in Australia had fallen by 2,300 or 15 per cent up to June 30, 2014 – not including the latest downturn.

The Abbott government is hoping to strike an agreement with cross-bench Senators, many of whom are actively anti-wind and involved in a Senate-sponsored wind inquiry. However, Ricky Muir, from the Motorists Party, said he wanted a bipartisan agreement between the two parties.

He suggested Labor could even drop to the 32,000GWh limit demanded by the Coalition, with the idea of lifting the target if elected at the next election. That, Muir said, would at least provide a floor for investment.