Australian renewables head for "boom-time" – led by states | RenewEconomy

Australian renewables head for “boom-time” – led by states

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CEC report says 2017 to be biggest year for renewables since Snowy Hydro 1, as industry shakes off Abbott-era uncertainty and state govts take lead.

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Australia’s renewable energy industry is shaping up for a “boom-time” 2017, powered by a rebound in hydro-power generation, ambitious and motivated state and territory governments, the plunging cost of big solar, and a burgeoning national commercial solar sector.

In its latest annual Clean Energy Australia report, the Clean Energy Council says that an “unprecedented program” of renewable energy projects was set to go to construction across course of thise year, totalling 3150MW of new generation capacity – approximately half what is needed to meet theå remainder of RET.

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“At least 30 renewable energy projects will be under construction during 2017, in what is shaping up to be the biggest year for the industry since the iconic Snowy Hydro Scheme was built more than half a century ago,” the report says.

The projects are also expected to deliver more than $6.9 billion in investment and create 3725 jobs, much of them in regional Australia.

The CEC said the “ambitious scope” of renewable energy development in 2017 was largely due to the bipartisan support returned to the RET in 2015, continued falls in the cost of RE and strong support from state and territory governments, as well as from ARENA and CEFC – the latter two are credited with pushing the price of large-scale solar down to almost half what it was just a couple of years ago.

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The report was particularly keen to note the influence of state and territory policies and targets, which it said had returned stability to a market “badly shaken” by the previous Coalition Abbott government’s extended RET Review, while also acting to “fill the void of robust national energy and climate policy” beyond 2020.

A glance at the list of state renewable energy targets explains why: ACT – 100% by 2020; VIC – 40% by 2025; QLD 50 per cent by 2030; SA 50% by 2025.

“Many state governments have recognised the job and investment opportunities available under the Renewable Energy Target,” the report says.

“Given much of the expected $10 billion of investment and thousands of jobs generated from renewable projects will go into regional areas, the attraction is obvious for governments seeking economic opportunities outside the major cities.”

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On 2016, the report described this as a “breakthrough year” for renewables – albeit, with subdued project activity – as the last of the Abbott-era policy hangover was cleansed from the sector.

For the year, only three new wind farms became operational, along with seven solar power plants – almost all of which, the report notes, had additional support beyond the RET, with two out of the three wind farms supported by the ACT government’s reverse auction program and many of the solar farms attracting support from the ARENA.

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Despite this, renewable energy supplied 17.3 per cent of Australia’s electricity during 2016 – the highest proportion of Australia’s electricity of any year this century.

Combined installations generated around 17,500GWh – enough to power roughly 8 million average homes, and taking the nation just over half way towards achieving its 2020 RET of 33,000GWh.

Interestingly, the official employment numbers in the RE industry were down 15 per cent, compared to the the previous financial year – and at 11,150 in 2015-16FY, well below the industry peak of 19,000-plus in 2011-12, when rooftop solar was booming.

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As for South Australia, which is expected to reach its 50 per cent renewable energy target sometime this year – eight years ahead of schedule – the state-wide blackout at the end of 2016 is seen in the report as the energy crisis we had to have, resulting in an “increased and long overdue focus on the reforms necessary to ensure the system can support higher levels of renewable energy in the future.”

“Investment confidence has rebounded and our economy is set to reap the benefits through a massive increase in activity between now and the end of the decade,” said CEC CEO Kane Thornton in comments on Tuesday.

“Every month brings new project announcements. While total investment in large-scale renewable energy was $2.56 billion last year, $5.20 billion worth of projects have secured finance in just the first five months of 2017 and have either started construction or will begin this year,” he said.

But the report is also careful to note that federal renewable energy and climate policy needs further attention, beyond 2020, for this momentum to continue.

“Australia is realising the significant benefits of backing the renewable energy industry,” It says. “For these economic benefits to continue, clear policy direction and support is required beyond 2020.”

On electricity prices, the report produced a couple of interesting charts (right and below) to support its observation that – at a time of soaring electricity prices – the states in Australia with the most renewables have tended to fare the best, contrary to the popular conservative political argument that a higher renewables grid equates to higher power bills. And that, nationwide, renewables are helping to bring those costs down.

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Other highlights from the 2016 Clean Energy Australia report include:

  • The installation of rooftop solar systems was steady during 2016, with 135,370 systems installed throughout the year, So far in 2017, this has accelerated, with the industry posting its largest ever March quarter for rooftop solar, and the biggest of any quarter since August 2012;
  • A resurgent hydro sector (more rain) was the strongest contributor to a bounce in overall renewable energy generation in 2016;
  • Commercial solar – between 75-100kW – is now Australia’s fastest growing RE sector, helping to push up the average size of solar power systems to 5.56 kW at the end of 2016;
  • Commercial systems between 30-100 kW are particularly popular in the ACT, New South Wales, South Australia and the Northern Territory, where they make up about 30 per cent of sales; and
  • While “only” 6750 energy storage units were installed in 2016 (SunWiz), this was a 13x increase on the year before, and SunWiz is predicting a tripling of that number in 2017, particularly since energy security is “now a front-of-mind issue for many Australians.”
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4 Comments
  1. Steve 3 years ago

    LCOE figures without explicitly stated assumptions are pretty useless. They need to provide a summary of the type of generation being summarised (e.g. coal in this case is with CCS) and key assumptions for both CAPEX ($/MW) and OPEX (e.g. $/GJ fuel cost). The CEC report just references BNEF and the BNEF report is locked. The range reflected for CCGT seems very small for something that can have massive fluctuations and is highly dependent on a volatile fuel market.
    In Lazard’s LCOE report they show fuel representing 65% of natural gas LCOE and a range that can more than double. This is a very relevant fact in a country that has seen gas prices double and can expect more to come as we reach or exceed LNG-netback parity. https://www.lazard.com/media/438038/levelized-cost-of-energy-v100.pdf

    • Bristolboy 3 years ago

      It is disappointing. But on the positive at least it shows that new build coal is completely uneconomic. I think the cost differential between wind and solar is an interesting one to watch – whilst it my be the case that ultimately solar PV is the cheapest source it is getting a lot of good competition from wind which should hopefully result in both technologies constantly innovating to drive down costs.

  2. juxx0r 3 years ago

    The most interesting thing about the interesting charts is that somebody thought it was appropriate to not break down the cost of power in the breakdown of charges.

    What sort or moron thinks it’s irrelevant to the topic to not actually include the cost of the product?

  3. Les Johnston 3 years ago

    Not really a “boom time.” Renewable energy has been stuck in the 20th century due to rigid policies developed when coal was the fuel for everything. The lack of policy and regulation change needed to bring Australia into the 21st Century has been hampered by political decisions and ex-politicians acting as lobyists for the fossil fuel industry. Why is there a diesel fuel rebate for miners? Why do people pay taxes used for health services on others and not get a rebate if they don’t use health services?

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