Summary In recent years, investment in renewable energy has increased significantly in Australia, contributing to an ongoing shift in the mix of electricity generation away from conventional fossil fuel sources. Investment in renewable energy production has skyrocketed in Australia in recent years, driven by a combination of factors including government policy incentives, high electricity prices and the declining cost of renewable energy technologies. Investment in renewable energy has supported business activity and employment in Australia, especially in regions where large renewable energy producers tend to be located.
As the market for such project finance has grown in Australia over the past five years, developers of renewable energy power plants now have better access to finance. The Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) and the Australian Renewable Energy Agency (ARENA) also play an important role in helping developers secure funding through direct project financing and encouraging private investment.
Since 2012, ARENA has supported 566 projects with $1.63 billion in grants, allowing about $6.69 billion to be invested in the renewable fuels sector. Despite the absence of an official zero target, Australia has seen an increase in investment in the renewable energy sector. Australia’s 2021 Renewable Energy Report released by MinterEllison and Acuris shows positive signs of a return on investment in Australia’s renewable energy sector.
The industry hit a major milestone in 2020 with renewables accounting for 27.7% of Australia’s total electricity generation and for the first time more than a quarter of the country’s energy comes from renewable sources. The share of renewables in total electricity production in 2020 was the highest since the mid-1960s. A report from the Clean Energy Council showed for the first time that more than a quarter of Australia’s electricity came from renewable sources in 2020.
Once again, the wind energy sector recorded its second straight record year, supplying over a third (35.9%) of Australia’s clean energy in 2020. % of total electricity generation from clean energy in 2020.
A Reserve Bank study last year found that investment in renewable energy increased to account for almost 5% of non-mining business spending in Australia in 2018, but then fell sharply. The Clean Energy Council’s latest investment report, due tomorrow, will show that $18.6 billion was invested in renewables in 2020, with a total generating capacity of 10,395 megawatts. in large-scale investments in renewable energy.
Investment declines continued as the Morrison government shifted the focus of the Morrison government’s policy towards lowering the cost of commercially unsustainable technologies such as carbon capture and storage and low-carbon hydrogen to reduce greenhouse gas emissions. Since 2016, a number of factors have spurred investment in large-scale renewable energy projects, including high wholesale electricity prices, political stimulus from the government, lower technology costs, and better access to finance.
This is a significant hurdle as AEMO’s 2020 Integrated System Plan (ISP) indicates that US$66 billion will be invested in large-scale renewable energy production and storage over the next 15-20 years (mostly in the regions) and US$27 billion in the solar battery and battery on the roof. Improving the transmission infrastructure and investing in energy storage is essential to maintain the stability of the electricity grid and support the continued growth of renewable energy production. A potentially major impediment to the expansion of renewable energy production, not only here in Australia but worldwide, is the rapid and widespread need for investment in transmission infrastructure.
Just yesterday, Australia announced $100 million in grants for large-scale battery storage projects, noting that the technology will play an ‘important role’ in Australia’s energy infrastructure mix as more renewables enter our grid. energy. According to the latest report from Wood Mackenzies on the Australian energy storage market, sixteen large batteries will increase the total storage capacity in Australia to 2.7 gigawatt-hours.
Wind and solar lead the way, but the country is looking at investments in hydropower and bioenergy, as well as battery and hydrogen storage sectors. A profitable opportunity for private players in the Australian and regional renewable energy market is also very attractive, facilitating the transition to safer and cleaner energy. According to the Australian Energy Market Operator (AEMO), for every dollar invested in renewable energy, there is 90 cents in wind and solar energy. In Western Australia, prices have risen due to the decommissioning of a number of power plants (mostly coal-fired) coupled with rising prices for key inputs such as gas and hard coal, which has spurred large-scale investment in renewable energy.
Feed-in tariffs have been put in place in every Australian state to encourage investment in renewable energy by providing higher than commercial tariffs for electricity generated from sources such as rooftop solar panels or wind turbines. Efforts by the Australian government, as well as private sector actors, are needed to reduce or eliminate reliance on coal to meet Australia’s energy needs. The Australian Council of Governments Energy Council is leading energy reform in Australia, including regulatory harmonization. The public may already be seeing the benefits of the energy transition as the industry employs 30,000 Australians.
The cost of commercial-scale wind power in Australia is expected to continue to decline, with new wind farms expected to generate electricity at around US$50-65/MWh in 2020 and below US$50/MWh in 2030. steps have been taken to develop a new renewable hydrogen industry in Australia. While Australia lost a spot in the latest Ernst and Youngs (EY) Renewable Country Attractiveness Index (RECAI), we now see evidence that investment is on the rise and 2022 could be a major turning point for clean energy development. domestically with several Power Purchase Agreements (PPAs) and a long-awaited investment in our transmission infrastructure is on the horizon.