The Clean Energy Regulator also released its own data, which shows that the surge in project announcement, particularly in the more quickly-constructed solar plants, means that the 2020 target is likely to be reached – and a long predicted deficit in large scale certificates in 2018 may also be averted.
The pace is so great that according to executive general manager Mark Williamson, enough projects could be committed by the end of this year to meet the 2020 target – that will be one year earlier than anticipated. Already, 3,300MW has been committed in the last 15 months, and most of it in the last six to eight months and there was a huge pipeline ahead.
The main cause is the push to solar, which is falling in costs and can be built faster. The use of single axis tracking is also increasing its output from around 25 per cent capacity to more than 30 per cent capacity.
“The momentum we saw in the second half of 2016 has continued into 2017. Already we have one-third of the total build required for 2017 achieved in the first four months of the year. If we continue like that, we will get enough commitments by the end of the year. And our market information is that there are some big announcements coming in the net few months.
“This demonstrates that Australia is now in a strong position to meet the 2020 Renewable Energy Target,” Williamson said. To which Wayne Smith, from the Australian Solar Council retorted: “Perhaps we should go back to the original RET target of 41,000GWh.” The target was cut under the Abbott administration.
The fact that the target will likely be met means the current high price of large scale generation (LGC) certificates will fall from their current levels above $80/MWh, a level that has attracted huge interest in the Australian market from international players. Already, it is down to around $76/MWh
Even though the target will largely depend on the action of the major players in the market, particularly the retailers, it suggests the market is doing its job.
The shortage of projects was reflected in the high price, and that has provided a signal for more projects. Hence the target was met. Most project developers would have preferred a more stable policy environment, given the investment drought caused by the uncertainty of the RET under the Abbott government.
Solar is the big focus of development, Of the 98 new power plants above 100kW that were accredited in 2016, 86 were solar, which federal energy minister Josh Frydenberg said reflects the rapidly declining cost and increased capacity of solar PV.
Australia’s energy market is undergoing an unprecedented and unstoppable transformation,” Frydenberg wrote in an article for the Australian Financial Review.
“What is remarkable is the how fast the cost of these new technologies are coming down.” He described this as “good news” and said the technology could be successfully integrated with the right planning.
The CEC, meanwhile, says that there are 35 projects that are already under construction, will start construction or have been completed in 2017.