Investment in large-scale renewable energy and storage accelerated in the last three months of 2022, creating the largest quarterly investments in more than four years, but the pace remains inadequate, says the Clean Energy Council.
Developers made financial commitments to renewables and storage totaling $4.29 billion in the December quarter, a 10x increase over the prior three months.
The end-of-year streak brought investment commitments to $6.2 billion for 2022, an increase of 17% over the previous year.
“While the uptick is encouraging, a quarter is not a trend,” said council chief executive Kane Thornton. “Australia is rolling out large-scale new generation (wind and solar farms) more slowly than necessary to reach the target of 82% renewable energy in the National Electricity Market” by 2030.
“The fact is that the 12-month rolling quarterly average investment hasn’t broken above $2 billion since the second quarter of 2019,” Thornton said.
The details of the investment come a fortnight after the Australian Power Market Operator warned of potential “reliability gaps” in the national electricity grid without “urgent” action in the coming years to encourage more capacity and storage of clean energy.
An indication of how the pressure on the grid may mount came on Monday when the first major heatwave in eastern New South Wales in more than a year smashed March electricity demand records by almost 1,000 megawatts, the AEMO said.
Thornton said the jump in investment was a response to the “more positive political and policy environment” and greater coordination by governments.
Still, much of the expansion in commitments was the result of the financial approval of the 756MW first stage of the Golden Plains wind farm, northwest of Geelong. That first leg alone was worth $2 billion, the council said.
The project also accounted for more than a third of the 1923MW of new installed capacity that reached financial close during the quarter. The account quadrupled from the prior quarter, lifting the 12-month moving average to its highest level in five quarters.
The industry is relying on fewer but bigger projects if recent trends are any guide.
Last year, 15 generation projects totaling 3.57 gigawatts of installed capacity obtained financial approval. In 2021, the tally was 23 projects for 3.06 GW, the council said.
New South Wales led with its five projects accounting for 1559MW in 2022. Victoria came second with its four new projects adding 945MW of new capacity, ahead of Queensland’s three projects with 495MW.
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On the storage front, South Australia’s 800 MW-hour Blyth Battery was the largest single project to reach financial close in the December quarter.
For the full year, investors approved 12 projects totaling 7,374MWh of storage, more than double the 2,900MWh – also for 12 projects – in 2021, the council said.
Delays of at least a year on Snowy Hydro’s gigantic pumped hydro 2.0 scheme and its gas- and hydrogen-powered Kurri Kurri plant have added to energy supply concerns of late, particularly as the aging coal power plants.
AGL Energy’s Liddell coal plant in the Hunter Valley, now operating just three of its four units, will be the next to shut down, with the remaining 1,260 MW scheduled to shut down on April 28.
Thornton called for the renewable energy target to be raised and extended beyond its current 2030 deadline to support the sector.
“We know that to have a real effect on energy prices in the long term, Australia needs the security of low-cost electricity direct from solar and wind power and to reduce our reliance on increasingly expensive gas and electricity generation. unreliable coal,” he said.
