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Australia at risk of being locked out of global superpower race

Australia’s ambition to lead the world as a renewable energy superpower is at risk following dramatic increases in ambition and levels of policy support for clean energy from other major economies, according to Clean Energy Council Chief Executive Kane Thornton.

Speaking at an industry roundtable this morning, Thornton said Australia has vast untapped potential in renewables and storage but was now facing a global clean energy arms race that requires new levels of leadership and policy support to ensure we unlock Australia’s full potential.

“If we want to compete for private investment in a competitive global environment, we need long-term policy settings that incentivise private capital to invest in Australia,” Thornton said.

“The production of green hydrogen and the rollout of renewable energy in the United States is now backed by enormous new incentives. Protecting Australia’s competitiveness will require a strong national response, including incentives for green hydrogen production and renewable energy investment.

“Australia has a small window of time to stake our claim in the emerging green industries of the future, which can ultimately overtake our declining fossil fuel industries and revitalise and expand our local manufacturing base.

“There is no doubt that Australian governments have the necessary ambition. We now need to match that ambition with a cohesive strategy and policy framework that will stimulate the new wave of investment in clean energy and green manufacturing.

Thornton said that the unprecedented investment in clean energy by the United States, Canada, and, most recently, Europe was acting as a giant magnet for clean energy investment, making it harder for Australia to attract green capital, equipment and skilled workers.

Thornton said a key pillar of any strategy should be an extension of the Renewable Energy Target (RET) to accelerate investment.

“The Renewable Energy Target has operated successfully over the past decade and helped Australia double its renewable energy capacity in just the last five years,” Thornton said.

“Increasing and extending the Renewable Energy Target scheme would be a relatively simple and efficient approach for encouraging investors to accelerate clean energy deployment in Australia.”

Australia’s Renewable Energy Target has been met, and demand for new large-scale generation certificates is being primarily supported by voluntary demand from the private sector. The RET is due to wind up at the end of 2030.

Given the long-lead times for major infrastructure projects, including wind, solar and energy storage facilities, 2030 now represents the ‘near term’. An extension to the RET would ensure the Australian Government delivers on the ambition of 82 per cent renewable energy by 2030 and rebuild Australia’s clean energy competitiveness in light of these enormous policy changes we are seeing globally.

“This would also deliver lower power prices by increasing the supply of low-cost power and further reducing our reliance on increasingly expensive gas and unreliable coal generation,” Thornton said.

Thornton was speaking at an investor breakfast focused on the impact of the United States Inflation Reduction Act on Australia’s clean energy future alongside Dr Andrew Forrest, Chairman of Fortescue Industries and Anne Valentine Andrews Managing Director, Global Head of Real Assets, BlackRock Alternative Investors.