In Abu Dhabi, at a series of sessions at the World Future Energy Conference on the future of global renewable energy investment and clean energy markets, there was a lot of debate among some of the world’s leading bankers and clean energy developers about which countries offered the best opportunities.
Some suggested China, India, the Middle East, Africa and the Americas, both north and south. There was no doubt about which offered the worst opportunity. Australia.
“Australia is dead,” said Edgare Kerkwijk, the head of Singapore-based Asia Green Capital, to the general agreement of all.
Just how dead the market is has been highlighted by the fact that no new projects have gotten financial commitment since the election of the Abbott government in late 2013. In 2014, investment in large scale renewables plunged 88 per cent, taking Australia from 11th ranking to 39th.
A new report from Green Energy Markets, looking at the last quarter of 2014, notes that only one large scale project got new finance approval in 2014 – the 70MW Moree solar farm, and that was mostly due to the financing awarded by the Australian Renewable Energy Agency and the Clean Energy Finance Corporation.
(There was also around 10MW of larger scale solar, about the only construction that was committed and occurred under the RET itself).
The big problem, and one that could finally seal the exodus of many international players and financiers, is that Australia needs to commit to 5,000MW of new renewable projects over the next two years if it is to meet the current 41,000GWh target.
Some utilities and fossil fuel companies are arguing that this is not possible, using the delays caused by the uncertainty (in turn caused by their lobbying for the RET to be diluted or scrapped), as the main justification for delaying, cutting or scrapping that target.
Most clean energy companies say this is not right, and the target will still be met. But the longer the uncertainty remains, then the harder it will be to meet.
According to the GEM data, Australia will need to build around 7,950MW of wind – and solar – installations to meet the target, whether it remains as a 2020 target, or a 2022/23 target as suggested by the Climate Change Authority.
If the target is reduced to what the Coalition government calls a “real” 20 per cent, then just 3,150MW will be required to be built between now and 2020. The Labor position, which appears to be ready to accept a cut to 37,000GWh, then 6,850MW will need to be built. The CCA suggestion results in 7,600 MW of new projects.
These are outlined in the graph below. But until an agreement is reached, then nothing is likely to be committed.