Wind, solar and battery projects at record high, but most stuck in funding, supply chain and other bottlenecks

The pipeline of new projects seeking to connect to Australia’s main grid has hit record highs – with battery storage taking the lead once again – but too many of them are struggling to overcome funding, supply chain and other bottlenecks.

The latest Connections Scorecard released by the Australian Energy Market Operator late last week shows that the overall project pipeline of new projects has has increased 33 per cent over the last 12 months from 50.5 gigawatts (GW) at the end of March last year to 67.3 GW at the end of March this year.

That is nearly as much as the existing capacity of 73 GW (if you don’t count rooftop solar and home battery assets), and utility scale battery projects account for around half of the total pipeline.

But despite the big increase in the connections pipeline, particularly at the early stages which grew by 51 per cent over the past year from 19.7 GW to 29.8 GW – with 18 projects totalling 5.5 GW in the March quarter alone – many are making slow progress.

“We’re seeing a continued trend of projects taking longer in the proponent implementation phase, due to prolonged funding uncertainty, project ownership changes, supply chain and resource constraints, and design modifications,” AEMO’s head of onboarding and connections Margarida Pimentel said in a statement.

“What’s important is that these projects continue through to registration and commissioning to full output, so they can support reliability and the transition of the power system.”

Australia has set an ambitious target of 82 per cent renewables by 2030, and although the Capacity Investment Scheme has offered underwriting agreements to several dozen projects, only a few have reached financial close and are beginning construction.

Federal energy and climate minister Chris Bowen insists the target is still achievable, although a stretch, and argues that the CIS is still working, although he conceded last week in an interview with Renew Economy’s Energy Insiders podcast that wind projects need more work.

Pimental says the growing pipeline will help meet an anticipated 28 per cent rise in electricity demand by 2035, and offset the planned retirement of 11 GW of mostly coal-fired power stations over the next 10 years, including Eraring, Bayswater and Vales Point in NSW, Yallourn in Victoria, and Callide B in Queensland.

The biggest increase in the connection pipeline came in the latest data came from standalone battery capacity, which rose be near two thirds to 33.2 GW from 20.5 GW in a single year.

Grid-scale solar rose from 17.7 GW to 20.7 GW, and wind from 8.32 GW to 9.75 GW. Hydro (mostly the under construction Snowy 2.0 and Kidston) remained stable at 3 GW, while gas capacity decreased by 74 per cent, from 0.9 GW to 0.2 GW, mostly because of the commissioning of Snowy Hydro’s Hunter gas fired power station.

AEMO noted that batteries now comprise 49 per cent of total capacity in the NEM connections pipeline, with around 74 per cent of battery projects use grid-forming inverters, which will be crucial in helping provide the “heartbeat” of the grid, known as system strength, as coal fired power stations retire.

The five projects that reached full output in the latest quarter were:

• Hunter Power Station (660 MW)

• Clarke Creek Wind Farm – pictured above – (440 megawatts)

• Swanbank Battery Energy Storage System (250 MW / 500 megawatt hours)

• Limondale Battery Energy Storage System (50 MW / 400 MWh)

• Wangaratta Solar Farm (22 MW).

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