Renewable energy investment of $4.29 billion in Australia increases 10x during December quarter
In the last quarter of 2022, the Clean Energy Council noted an increase in investment in large-scale renewable energy and storage, which was the highest quarterly investment in over four years, yet still not enough.
In the fourth quarter of the year, developers dedicated $4.29bn to renewable energy sources and storage, representing a dramatic tenfold increase from the prior quarter.
At the close of the year, investment pledges rose to $6.2bn for 2022, a 17% increase compared to the year before.
According to Kane Thornton, the chief executive of the council, although the improvement is welcomed, a single quarter does not create a pattern. He also pointed out that Australia is behind schedule in regards to introducing sizable wind and solar farms to the National Electricity Market in order to meet the 82% target for renewable energy by 2030.
Thornton noted that the rolling quarterly average investment has not surpassed the $2 billion mark since the second quarter of the year prior.
Approximately two weeks after the Australian Energy Market Operator highlighted the possibility of "reliability gaps" in the electricity network, a statement was made concerning the need for substantial investments to spur the growth of renewable energy sources and expand storage capabilities.
On Monday, Australian Energy Market Operator (Aemo) revealed that record electricity demand had been hit in eastern New South Wales due to the first significant heatwave in over a year. This demand-spike of nearly 1,000 megawatts highlighted the pressure on the grid as noted on Twitter.
According to Thornton, the recent increase in investment is due to the "improved political and policy climate" and better cooperation between authorities.
The expansion in commitments was mainly due to the financial approval of the 756MW Golden Plains windfarm, located north-west of Geelong. This first stage was estimated to be worth $2bn, according to the council.
During the quarter, the project represented over 1,923 megawatts of new installed capacity having achieved financial close. This was a substantial increase from the prior quarter and the rolling 12-month average achieved its highest point in five quarters.
The current patterns appear to indicate that the sector is now focusing on a few, yet more substantial undertakings.
In 2020, 15 generation projects that added up to 3.57 gigawatts of installed capacity were given financial clearance. This year, the figure was 23 projects for 3.06GW, according to the council.
In New South Wales, the five initiatives combined are estimated to generate 1,559MW of energy in 2022. Victoria's four projects are expected to contribute 945MW, which places it ahead of Queensland's three ventures that are anticipated to generate 495MW.
In the December quarter, South Australia's Blyth battery, the largest single project with a capacity of 800MW-hours, achieved financial closure.
In 2021, the council announced that the total of 12 projects added up to 2,900MWh of storage; however, for the whole of this year, investors approved a heightened number of 12 projects and a staggering 7,374MWh of storage.
Recently, the Snowy Hydro 2.0 pumped hydro scheme and the Kurri Kurri plant, powered by gas and hydrogen, have encountered delays of at least one year, which has caused concern regarding energy availability, especially as older coal-fired power stations are being shut down.
The Liddell coal plant of AGL Energy, located in the Hunter Valley and operating with only three of its four units, is set to be switched off on April 28th, leaving 1,260MW unutilized.
Thornton urged to expand and extend the renewable energy target beyond its current 2030 expiration, in order to sustain the sector.
He highlighted that for Australia to make a real impact on long-term energy prices, solar and wind power need to be utilized which will provide the security of cost-effective electricity, and reduce the dependence on highly priced gas and inconsistent coal production.