Big questions remain over the ability of the Federal Government’s new National Energy Guarantee (NEG) to deliver the confidence required for new investment in clean energy, the Clean Energy Council says in a new position paper on the policy.
While the industry remains open-minded and prepared to engage constructively on the NEG, new analysis by the Clean Energy Council suggests that investment in new renewable energy could hit a wall after the Renewable Energy Target (RET) stops encouraging new large-scale projects in 2020.
“Put simply, more renewable energy is under construction this year than what the NEG is expected to deliver over the entire next decade,” said Clean Energy Council Chief Executive Kane Thornton.
“The information currently available suggests that between 250 to 670 MW of large scale renewable projects will be deployed per annum throughout 2020-2030,” Mr Thornton said.
“Compare that to the 4300 MW of projects currently committed or under construction and you can probably understand why the industry has some serious concerns. If the emissions abatement under the scheme is pushed out closer to 2030 as some have suggested, this would make the prospects for renewable energy bleak early in the decade.”
The analysis is based on preliminary information released by the Energy Security Board, and the renewable energy industry is keen to see more detail on the policy.
Currently the focus for the industry is on understanding the risks and benefits of the NEG and informing the design of the core policy architecture.
A national energy policy needs to drive investment in new renewable energy and the lower power prices that all Australians want, but a range of key design questions remain. Currently the lack of guarantee for investors on either an appropriate price signals or long-term confidence, investors are unlikely to outlay the new investment which would place downward pressure on power prices.