Markets

Green hydrogen export potential lifts Australia to No. 3 on global renewables index

Published by

Australia has reached its highest position ever on the Ernst & Young (EY) Renewable Energy Country Attractiveness Index, jumping to third place for the first time thanks to a big boost from its green hydrogen and solar energy export plans.

In the latest edition of the biannual RECAI, which ranks the world’s top 40 countries based on investment in renewable energy, EY moved Australia up one spot from number four in the May rankings, putting it behind only China and the US, in that order.

The report notes a global “surge of interest” in green hydrogen in 2020, from policymakers and investors alike, highlighting its potential to support decarbonisation – particularly for countries with limited potential for their own renewable generation capacity.

Source: EY
Source: EY

But Australia was given a special mention on the subject, with EY’s Oceania power and utilities leader Igor Sadimenko noting on Wednesday that its shift up the leader board suggested Australia was poised to become a green energy exporting leader.

“This is largely due to developers and investors driving renewed growth in Australia’s renewables sector, while the market has ambitious green energy export plans,” Sadimenko said.

These plans refer largely to two “mega projects” highlighted in the 56th RECAI report: Sun Cable’s 10GW/30GWh solar/battery project that aims to send renewable electricity to Singapore via a 4,500km cable; and the 15GW Asian Renewable Energy Hub.

The latter project, backed by Macquarie Bank, Vestas, CWP Energy and InterContinental Energy, is described in the report as the world’s largest wind-solar hybrid project, with plans to generate “vast amounts of renewable energy” to produce green hydrogen and ammonia for export.

“The two mega-projects would elevate Australia to a renewable energy export superpower,” writes Jomo Owusu, director, infrastructure advisory at Ernst & Young, in a breakout article as part of the REACI report.

“But it must still be proven to investors that the projects are profitable and there is the know-how to conquer the complex technical challenges posed.”

Owusu notes that Australian policymakers have already pledged their support for renewable hydrogen, with both the federal and state governments supporting renewable hydrogen pilot programs and trials, and helping to fast-track projects like the Asian Renewable Energy Hub.

“Australia has long been a net exporter of energy, with predominantly coal and gas equaling to around two-thirds of production,” he writes.

“As the country’s energy sector transitions to a low-carbon future, however, it seeks to also transform its exports and become a renewable energy export superpower.”

Source: EY
Source: EY

Australia is also gets a gong from EY for “betting on big battery storage,” as regulators and grid operators begin to realise the important role storage needs to play to allow the smooth shift to renewable energy.

“This year, Australia is set to add 1.2GW of energy storage, more than double last year’s total … as developers look to maximise returns from their wind and solar projects,” says Owusu.

“Power prices look set to drop with the country’s trailblazing battery storage expansion,” he adds.

“Amid these favorable conditions, the costs of energy storage systems are expected to decline by 27% over the next five years.

“By 2025, the levelised cost of electricity of solar-plus-storage and solar-and-wind-plus-storage are expected to be lower than that of gas plants, which should mark a tipping point for Australia’s renewables sector.”

But the view is not all rosy, of course. The EY report also notes that problems around price volatility and grid stability could “cloud the picture” for renewables, if solutions are not found to bolster system strength and network capacity.

“While developers and investors are driving renewed growth, and ambitious export plans lie in the pipeline, the sector is facing headwinds on grid stability and price volatility,” says Owusu.

“Renewables projects have been held back by grid bottlenecks and have faced the risk of radical curtailment because of insufficient network capacity and system strength.”

Sophie Vorrath

Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. She is the co-host of the Solar Insiders Podcast. Sophie has been writing about clean energy for more than a decade.

Recent Posts

Hydro Tasmania on the hunt for a new CEO amid political and renewable turmoil

Tasmanian utility begins hunt for new CEO, following the news that current chief will step…

28 March 2024

Capacity Investment Scheme needs to set high bar for communities hosting renewables

Without exception, the CIS should encourage projects that do good community engagement, with good environmental…

28 March 2024

Australia’s biggest coal generator teams up with SunDrive to make solar at Liddell

AGL signs MoU with Cannon-Brookes backed PV innovator SunDrive to explore "first of its kind"…

28 March 2024

Solar ducks and big batteries: How Alice Springs grid could run five hours a day with no fossil fuels

Alice Springs may be able to run on 100 pct renewables for an average five…

28 March 2024

“Unconscionable:” Eraring delay could cost $150m a year, adding to massive Origin windfall, report says

New analysis says the potential taxpayer cost of keeping Eraring open for another few years…

28 March 2024

Solar Sunshot: Albanese pledges $1bn to take Australia from “pit to panel”

Federal Labor puts its money on Australian made solar, pledging $1bn to kickstart the supply…

27 March 2024