“Too difficult:” Vestas says wind projects will stop if Australia doesn’t invest in grid

Global wind giant Vestas says new wind projects will grind to a halt if the federal government fails to ensure that the electricity grid evolves, because getting a grid connection will become too difficult and too expensive.

Peter Cowling, an industry veteran who heads the Asia Pacific business of the Denmark based Vestas, says Australia has the opportunity to be a global leader in the rapid transition to renewables. But it won’t be able to do that without federal government support.

“To maintain its advantage, Australia needs the Federal Government’s support in accelerating the transition to renewables, by ensuring the electricity grid continues to evolve,” Cowling said.

“If the grid doesn’t evolve and we don’t add the new transmission lines that are needed, the renewables rollout, including wind power, will grind to a halt – because it’s too difficult and expensive to connect to the grid.”

The Australian Energy Market Operator has already released one 20-year blueprint for a transition to a renewables based grid, known as the Integrated System Plan, and is about to release an updated version that will plot a path to a decarbonised grid as early as the mid 2030s.

But the federal government, and energy minister Angus Taylor, has largely ignored the AEMO plan, dismissing it as “lines to nowhere”, although it has provided some seed funding for some urgent transmission projects, such as the new link that will connect South Australia directly with NSW.

Cowling says the ISP is a great framework but he is concerned about the regulatory process for network investments, known as the regulatory investment test (RIT-T). “It take excruciatingly long. The industry will end up paused,” Cowling told RenewEconomy.

The new draft ISP is expected to identify the “step change” scenario as the most “likely”, rather than the “central scenario” currently used, but it is not yet clear to what extent that will help fast-track the regulatory process.

“I’m stoked that we have got a 2050 net zero target,” Cowling said. “But from a carbon budget perspective, if we don’t move really fast, and keep the momentum up, then we fall short.

“We have the opportunity to decarbonise the NEM (National Electricity Market) and the SWIS (the main grid in W.A.) almost completely in the next 10 years. That would give us the room to find ways to decarbonise other parts of the economy.

“But it (new development) could come to complete halt because if don’t have enough grid, and as each project gets harder and more expensive.

“If the grid doesn’t evolve and we don’t add the new transmission lines that are needed, the renewables rollout, including wind power, will grind to a halt – because it’s too difficult and expensive to connect to the grid.

Cowling said there is a clear shift in consumer and investor interest towards renewables, and Australia needs to move quickly to capitalise on this changing sentiment in the investment market, a warning similar to that made by Simon Corbell, the head of the Clean Energy Investor Group in the recent Energy Insiders podcast.

“It is imperative to get grid investment right – and fast – to future-proof Australia’s renewable energy economy, environmental outcomes and investment potential,” Cowling said in a statement.

“The grid takes a long time to build, so we have to get started now.

“Australia has a very limited carbon budget left to reach 1.5 or even 2 degrees. But we have a great opportunity to quickly decarbonise the electricity sector.

“The faster we do that, the longer our remaining budget will go as we work on the more difficult decarbonisation challenges in the economy. A year faster on electricity is a year longer to deal with tougher challenges.”