Investment in Australia’s renewable energy industry is drying up as developers warn a disproportionate level of risk is deterring the build-out of the next wave of wind and solar projects urgently needed to wean the nation off fossil fuels.
The federal Coalition’s promise to reach “net-zero” emissions by 2050, unveiled ahead of the COP26 climate summit in Glasgow, is partly based on a 97 per cent cut in the electricity sector’s greenhouse gas emissions.
Australia’s biggest clean energy investors warn not enough is being done to enable the next wave of clean energy projects crucial to achieving net-zero emissions targets.Credit:Joe Armao
However, after a period of significant growth, the roll-out of wind and solar farms has begun to slow. Year-to-date, 1.4 gigawatts of renewable capacity has been added, a 17 per cent drop from 2020 and 49 per cent below 2018 levels, according to JPMorgan. Just one new generator – a solar farm in NSW – was added to the grid last month.
Feedback compiled in the past week from 17 of Australia’s largest clean energy investors whose assets span roughly 50 per cent of renewable capacity countrywide suggests the Morrison government’s “net-zero” announcement has failed to lift souring investor confidence.
“The federal government’s 2050 net zero announcement has not shifted the dial when it comes to reducing risk in the electricity market and improving investor confidence in the renewable energy sector, Clean Energy Investor Group chief executive Simon Corbell said.
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“Australia is not planning for a fast enough transition to clean energy and this makes Australia a risky destination for investors focused on net zero outcomes consistent with the Paris Agreement.”
Long-running problems of congestion, system-strength issues and transmission losses across the east coast’s outdated, coal-based power grid have become worsening causes of frustration for investors, creating uncertainty around project timelines and revenue expectations and pushing up the cost of capital far higher than other OECD markets.
Without a greater focus on driving the transmission upgrades to better-connect and modernise the grid, the risks threaten to stunt the roll-out of more clean power at a critical time – just as more coal-fired power stations are scheduled to close their doors.
Net-zero vow fails to ‘shift the dial’ as renewables investment stalls
Source: Philippines Alive
