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 Clean Energy Regulator announced this month that the large-scale 2020 Renewable Energy Target (RET) has now been met. What happens next is unclear.
Quarterly investment commitments in new renewable energy projects reached a high of over 4500 MW in late 2018, but has since collapsed to less than 800MW in each of the first two quarters of 2019.
There has been a rapid increase in the number of utility-scale batteries being committed across Australia, combined with a proliferation of pumped hydro projects being investigated. There is no shortage of potential from utility scale batteries or pumped hydro to support the continued deployment of variable renewable energy projects. These storage projects can play a significant role to complement and support the continued deployment of renewable energy in a way that delivers a more resilient, affordable and reliable energy system.
However a lack of federal energy policy certainty and combination of a range of regulatory challenges mean that investment confidence in large-scale renewable energy and the accompanying energy storage is fragile. As Australia’s coal fired generation continues to close, there is a clear need for policy and regulatory reform to support the continued deployment of renewable energy and energy storage that will continue to reduce Australia’s energy sector carbon emissions, secure system reliability and lower energy prices.