Via The Guardian:
A new snapshot of Australia’s clean energy sector warns new investment committed in the first half of 2019 has fallen back to 2016 levels, when Tony Abbott invited an investment strike when he tried to abolish the renewable energy target.
While the Morrison government has been trumpeting record recent investment in renewable energy to rebut persistent arguments the Coalition lacks ambition on climate policy, an assessment of the investment outlook prepared by the Clean Energy Council, to be released on Wednesday, warns the positive trend is in danger of abrupt reversal because of the ongoing lack of policy certainty.
“After a record breaking two years of investment in large-scale wind and solar projects, the pace of projects reaching financial close has slowed dramatically over the past two quarters,” the investment outlook says.
“Quarterly investment commitments in new renewable energy projects reached a high of over 4500MW in late 2018, but has since collapsed to less than 800MW in each of the first two quarters of 2019.”
The report says the large-scale RET, which winds down after 2020, led to 15,700MW of new capacity being financially committed over the past two years, with that generation either under construction or recently commissioned.
“But with the absence of policy certainty beyond the 2020 RET and a range of regulatory barriers to overcome, investment commitments in new generation have fallen dramatically this year.”
It notes that with the rate of new investment now slowing, the forward outlook for wholesale energy prices has begun to rise again. “A sustained slow-down in the level of new large-scale generation will have a dramatic impact on Australia’s energy prices and reliability, as well as the ability to achieve future emissions reduction targets.”
Executives from the renewable energy sector will converge on Canberra on Wednesday for their annual chief executives forum and parliamentary reception.
The group will hear from the energy minister, Angus Taylor, the shadow minister, Mark Butler, and the Greens leader, Richard Di Natale, as well as the head of the Australian Energy Market Operator, Audrey Zibelman, who recently used Aemo’s latest 10-year forecast of reliability in Australia’s power supply to highlight the urgent need for more investment in dispatchable energy and in transmission infrastructure.
That Aemo forecast warned Australia’s ageing thermal generators are increasingly unreliable.
Pretty dumb. The renewable boom has been a very large part of recent capex growth in Australia:
Utilities investment is only 8% of the total but has comprised nearly half of total private capex growth during the recent boom.
Got to protect coal, though, via the AFR:
Energy Security Board chairwoman Kerry Schott says it is worth considering the idea of paying coal-fired power stations to stay in the energy market longer to help provide more stability in the transition to a low-emissions economy.
As Australia deals with the repercussions of a large influx of intermittent wind and solar into the National Electricity Market, Ms Schott said there needed to be better co-ordination of the retirement of older coal-fired and gas-fired power stations to avoid price shocks to the market.
“One of the things we have to give a bit of attention to is managing the retirement of old plants, particularly coal and gas,” Ms Schott said in an interview with The Australian Financial Review.
Only if you’re really, really stupid. Why isn’t everyone up in arms about this being sovereign risk for renewable investors?
Reserve gas, boost storage incentives, unleash renewables. Viola, investment boom, stable transition, low energy prices.
Everything else is interests.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
Latest posts by Houses and Holes (see all)
- Bill Evans on how the RBA should do QE - November 22, 2019
- Why you should ignore Goldman on Aussie interest rates - November 22, 2019
- How much lower is China’s growth than it says it is? - November 22, 2019