Investment in new renewable energy and storage throughout Australia is ramping up, new data shows.
But there are warnings that efforts will need to increase further in order to meet Australia’s climate objectives and plug reliability gaps as coal plants close.
In its latest report, the Clean Energy Council (CEC) says that investment in financially committed large-scale renewable generation and storage projects reached $4.3 billion in the final quarter of 2022.
This represents the highest level of quarterly investment since the third quarter of 2018 (see chart).
All up, six large scale generation and storage projects reached financial close during the quarter. Combined, these represent 193 MW of new installed capacity and 800 MWh or storage.
They included the first stage of the 756 MW Golden Plains Wind Farm in Victoria, the 412 MW Goyder South Wind Farm in South Australia, the 330 MW Mount Hopeful Wind Farm in Queensland, the 300 MW Walla Walla Solar Farm in New South Wales and the 125 MW Wandoan South Solar Project in Queensland along with one new storage project in the Blyth Battery in South Australia (800 MWh of storage).
Across calendar 2022, meanwhile, overall committed investment in large-scale renewable generation and storage projects increased by 17 percent to reach $6.2 billion.
Whilst investment in large-scale clean energy projects has picked up in dollar value terms, however, the number of large-scale clean energy projects that are reaching financial close remains modest.
All up, 26 such projects reached financial close in calendar 2022. This was down from 33 in 2021 and represented the lowest number of committed projects since the CEFC began recording data in 2017.
Furthermore, only 26 new clean generation and storage projects began construction in 2022 whilst only 18 were commissioned.
This compares with 32 projects which broke ground and 46 that were commissioned in 2021.
The latest data comes amid growing momentum to transition toward a clean energy economy.
The data also comes as concern is growing that Australia is not building renewable energy and storage fast enough to fill projected energy reliability gaps as coal-fired power stations close.
In the latest update to its Electricity Statement of Opportunities released last month, the Australian Energy Market Operator (AEMO) noted that without substantial new investment, all mainland states within the National Electricity Market (NEM) are forecast to breach the reliability standard from 2027 onward as at least five coal power stations totalling around 13 percent of NEM generation capacity set to retire by then.
When releasing that report, AEMO CEO Daniel Westerman said the update underscored the need for ‘urgent and ongoing investment’ in renewable energy, long-duration storage and transmission to ensure that Australia can continue to meet reliability standards.
Speaking of the latest data, CECA chief executive Kane Thornton said that investors are responding to a more supportive political and policy environment that combines stronger ambition, coordination and policy measures which are now in place from the Commonwealth Government.
But he warned that further investment was needed.
“While the uptick is encouraging, one quarter doesn’t mean a trend,” Thornton said.
“Australia is deploying new large-scale generation – wind and solar farms – more slowly than needed to reach the 82 per cent target (Commonwealth Government target by 2030) for renewable energy on the National Electricity Market.
“The fact remains that the rolling quarterly average investment over 12 months has not risen above $2 billion since the second quarter of 2019.
“The current policy settings are only going to get us so far, and it’s clear that with significant shifts in capital overseas through the United States Inflation Reduction Act and other responses from the likes of the European Union and the Gulf States, Australia needs to do more.”