Australia now has enough projects committed to meet the national 2020 renewable energy target
Thriving doesn’t quite cover it. New data released quietly late last
week underscores the staggering pace of growth of renewable energy
across Australia.
Nearly 3.5 gigawatts of large-scale clean energy projects were built in 2018. In capacity terms, this is more than twice the scale of Hazelwood, the giant Victorian brown coal plant that shut abruptly a couple of years ago, and it more than tripled the previous record for renewable energy installed in one year, set in 2017.
In generation terms, the amount of clean electricity being sent into Australian homes and businesses is expected to increase 36% this year, and should grow another 25% next year.
The Clean Energy Regulator, which released the report, says this makes Australia the global leader in per capita renewable energy deployment.
"It’s really just the commonwealth that’s a brake on things"
In an outcome considered near impossible four years ago, the country
already has enough projects committed to meet the national 2020
renewable energy target, roughly equivalent to about 23% of electricity
required. The regulator says Australia will go close to generating a
level of clean power next year that the parliament legislated to avoid
in 2015, after the Abbott government considered trying to abolish the
2020 target altogether before settling on reducing it by about a fifth.Nearly 3.5 gigawatts of large-scale clean energy projects were built in 2018. In capacity terms, this is more than twice the scale of Hazelwood, the giant Victorian brown coal plant that shut abruptly a couple of years ago, and it more than tripled the previous record for renewable energy installed in one year, set in 2017.
In generation terms, the amount of clean electricity being sent into Australian homes and businesses is expected to increase 36% this year, and should grow another 25% next year.
The Clean Energy Regulator, which released the report, says this makes Australia the global leader in per capita renewable energy deployment.
"It’s really just the commonwealth that’s a brake on things"
Hugh Saddler, an energy consultant and honorary associate professor at ANU’s Crawford School of Public Policy, says the pace of growth is equivalent to the electricity boom of the 1950s, when new coal and hydro plants transformed the electricity system. In a new report for the progressive thinktank the Australia Institute, he says the most populous state, NSW, doubled the power it received from large-scale wind and solar plants in just 14 months.
“There are just heaps of projects in the pipeline,” Saddler says. “NSW has lagged behind South Australia and Victoria for windfarms in particular, and Queensland has been even worse, but that has changed.”
He says the new renewable projects in NSW should comfortably fill the gap that will arise when the Liddell coal-fired plant shuts in 2022, a planned event deemed so potentially disastrous a year ago that the Coalition under Malcolm Turnbull attempted to put pressure on the plant’s owner, AGL, into reversing its decision.
The surge in clean generation is creating conditions that would have been unimaginable not so long ago. For a brief period last weekend, so much energy was being captured from the wind and sun, and demand for electricity use dropped so low, that the spot price for wholesale electricity simultaneously fell to $0 in each of the five eastern states connected through the national grid. At that moment, 44% of the electricity being used across the market was from a renewable source, compared with 26% across the week.
In terms of power bills, the zero price was mostly inconsequential. It was brief – most electricity is sold at long-term contract prices and the wholesale cost is only a fraction of what people are ultimately charged. But Tristan Edis, a director and analyst with consultants Green Energy Markets, says it was a significant moment for what it points to. “I was surprised it happened, but what it tells us is it could soon end up happening on days when demand is not low,” he says. “We are adding so much solar on top of existing solar at the moment. It is making a real difference in the middle of the day.”
The transformation under way is posing serious questions for regulators and generating companies. Coal-fired power plants, which still provide more than 60% of grid electricity, have traditionally been considered inflexible and capable of operating around the clock. Some black coal plants in NSW are being turned off during periods when it is not profitable to run them. Others are coming under increasing pressure as the amount of renewable generation increases. While the government now requires electricity generators to give three years’ notice before they shut a power plant down – an attempt to avoid a repeat of the abrupt closure of Hazelwood – analysts believe it is highly likely some will stop operating sooner than currently planned.
A big question for the clean energy industry is: can the pace of investment last? As Guardian Australia reported last year, conventional wisdom has been that clean energy investment and the pace of change in the system would fall off once the renewable energy target stopped driving new projects unless there was a new national policy to replace it. The federal government has no plans to introduce one, beyond a shortlist of projects it is considering underwriting but is yet to develop. State targets have generally been considered not enough to fill the void.
That remains the most popular view. The Clean Energy Regulator says investment after 2020 remains uncertain. But the Australian Electricity Market Operator last year found that even a business-as-usual path, including Victoria’s target of 50% renewables, was likely to lead to about 46% clean energy by 2030. Analyses had found that Australia could and would need to do more to play its part in achieving the Paris climate agreement target goal of limiting global heating to as close to 1.5C as possible.
Edis points out that some of the clean energy investment decisions now coming through were made when wholesale prices were high. As more generation comes on, supply outstrips demand and prices fall, there is less incentive to build unless a government policy requires it.
“To be honest, I expected the investment would have slowed a fair bit earlier,” Edis says. “My feeling is it should drop away over the next six months or so. Investors will then be looking for the next coal plant to cark it.”
Saddler is less certain. He sees roadblocks to further investment, including the challenge of connecting clean energy plants on greenfield sites to the grid and the need to “firm” variable renewable generation with increased between-state transmission cables and energy storage. But he says analysts and bureaucrats increasingly think some spending may continue in a way that was not expected a year ago.
“It’s really just the commonwealth that’s a brake on things,” he says. “The question now is: how significant a brake are they?”
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