New Clean Energy Council data reveals that the number of large-scale renewable energy projects committed in the second quarter of 2020 was the lowest since 2017, with just three projects representing 410 MW of new capacity reaching financial close.
At $600 million, investment in financially committed projects was at its lowest level since 2017. Investment in Q2 2020 was therefore down significantly on the historical average, with a 46 per cent fall from the previous quarter and 52 per cent lower than the quarterly average for 2019.
“This fall in investment reflects the growing risks being placed on renewable energy developers across the country. A recent analysis by the Clean Energy Council revealed that the primary drivers for this fall in investment relate to the challenges associated with the grid connection process, unpredictable government policy interventions and underinvestment in network capacity creating congestion and constraints.
“The obstacles around grid connection are creating substantial challenges for renewable energy developers, and in turn, spooking clean energy investors,” says Clean Energy Council Chief Executive, Kane Thornton.
“At the moment, projects are experiencing significant and often unanticipated delays through the grid connection process, which is having a big impact on the commercial terms of these projects and increasing risks for investors. Network congestion and system-wide challenges are contributing to unanticipated changes including to technical requirements, creating uncertainty about next steps and timing of resolution for project developers.
“This is weighing on confidence for new investment in the sector, at a time when we need more clean energy investment to boost jobs and regional development and ensure sufficient new generation is in place before old coal generators retire.
The Australian Energy Market Operator (AEMO) has recognised the issues associated with grid connection, and the Clean Energy Council is working closely with AEMO to improve the connection process, explore solutions and prioritise effort.
“AEMO’s 2020 Integrated System Plan (ISP) has delivered a clear roadmap for development of the energy system. To deliver this, we need to address the current grid connection challenges in order to build investor confidence for new clean energy generation.
“Australia has enormous opportunity to leverage renewable energy as part of a nation-building COVID-19 economic response, creating jobs and the infrastructure to support Australia’s future. This requires much needed regulatory reform, sensible energy policy, rapid improvements to grid connection processes and investment in the transmission backbone and energy storage.”
For more information or to arrange an interview, contact:
Clean Energy Council Media Manager
+61 409 470 683