Investment in Aussie renewables melted in 2019
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Investment in Australian renewables sank 40 per cent last year, according to data from Bloomberg New Energy Finance (BNEF).
Australia committed $US5.6 billion ($8.1 billion) to new capacity in 2019.
Late last year the Clean Energy Council said investment had fallen back to 2016 levels on the back of policy uncertainty.
The large scale Renewable Energy Target (RET), credited as supporting the massive levels of investment in the sector over the past few years, winds down in 2020 and is not being replaced.
The emissions reduction requirement of the National Energy Guarantee in 2018 was dropped by then-Prime Minister Malcolm Turnbull in a bid to keep his job, and the government has committed to not bringing it back.
The ASX has some 22 listed renewable energy companies, spanning solar and wind, but also biogas at Timah Resources (ASX:TML), waste-to-energy at Volt Power Group (ASX:VPR), and a retailer in ERM Power (ASX:ERM).
Globally, investment in renewables touched $US282.2 billion last year, up 1 per cent from 2018. BNEF data showed the world’s biggest market, China, slipping back, but the second-largest, the US, hitting a new record in spite of the Trump administration’s antipathy towards renewables.
“Offshore wind developers in China brought forward 15 projects to beat a scheduled expiry of that country’s feed-in tariff,” Tom Harries, head of wind research at BNEF, said.
“We expect the sector’s global momentum to continue in 2020, with the focus on gigawatt-scale projects in the British North Sea and the first commercial arrays off the US East Coast.”
Investment in on- and offshore wind was $US138.2 billion globally, up 6 per cent on the previous year. Solar hit $US131.1 billion, down 3 per cent.
BNEF says falling capital costs in wind and solar means that despite the lower investment levels, the two combined are likely to have seen around 180 gigawatts (GW) added last year, up some 20GW on 2018.
Offshore wind underpinned the marginal gain last year, an area Australia and the federal government are playing catch up with.
A late surge in new offshore wind projects meant investment in that sector touched $US29.9 billion, which was 19 per cent more than in 2018 and $US2 billion more than in the previous record year of 2016.
Europe and China were where the biggest investments were made, including the 432 megawatt (MW) Neart na Gaoithe project off the Scottish coast at $US3.4 billion, and the the 500MW Fuzhou Changle C installation in the East China Sea, at $US1.5 billion.
In Australia, the late surge was at the country’s first potential wind farm, as Copenhagen Infrastructure Partners (CIP) started research on wind and wave conditions and environmental impacts in a 496sqkm area off the south coast of Gippsland, to lay the groundwork for an $8 billion project named ‘Star of the South’.
This month the Department of the Environment and Energy issued a discussion paper on the way it wants to regulate the new sector.
As of September, Australia had 87 wind farms with an energy production capacity of 6,278MW, or around 10 per cent of the country’s total capacity.
Another 26 wind farms are in the pipeline with an additional 5,930MW over the next three years, bringing Australia’s total wind capacity to 12,208MW.