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The transition of Australia’s electricity sector to renewables is proceeding apace with more capacity per capita being installed in Australia than any other country.1 Investment in renewables is strong, and there is now enough capacity built or under construction to exceed the 2020 Large-scale Renewable Energy Target by a substantial margin. The Renewable Energy Target continues to deliver emissions reductions in our electricity sector, helping Australia meet our international emissions commitments.
In May 2018 we said there was enough capacity built or committed to meet the 2020 Large-scale Renewable Energy Target. From May to December 2018 there was an additional 3766 megawatts of firmly announced projects. This suggests that 2018 was the year in which commercial factors became a stronger driver for ongoing investment in renewables than incentives coming from the Large-scale Renewable Energy Target. Large-scale generation certificate prices fell significantly over this period as new generation came online and as the scale of the pipeline of new investment became clearer.
The transition to renewables poses some challenges to the operation of our electricity grids and is changing the economics of thermal generation. When combined with storage technologies, renewables offer flexible capacity to help match changing profiles of supply and demand.
We are seeing a significant increase in batteries at all scales, and many planned pumped hydro projects and proposed investments in the grid infrastructure. These will need to come on line quickly and at scale to accommodate potential additions of variable renewable energy. This will be a watch point in the next few years.
Consumers are becoming more informed about their options. We continue to see growth in rooftop photovoltaic (PV) for households and businesses, even as the level of the support from subsidies under the Small-scale Renewable Energy Scheme gradually decreases between now and when the scheme ends in 2030.
With the surge in renewables it is important to maintain a strong focus on compliance and integrity. We have, for example, collaborated with industry to implement the Solar Panel Validation Initiative, to provide a way to verify that panels are genuine. This innovation can be expanded to verify other elements of an installation.
We also continue to streamline and automate our own processes to improve efficiency for our clients and our agency. We are not a safety regulator but we do collaborate with electrical safety agencies by passing on inspections results we obtain under the Renewable Energy Target.
There is a strong pipeline of investment in the next year or so and the entry of new investors with strong balance sheets supports the view that there is an underlying strength to potential investment. Our agency is playing its role providing a stable regulatory framework for the transition to renewables by providing authoritative information to the market and collaborating with the electricity market bodies that are responsible for ensuring system reliability and security.
David Parker AM Chair, Clean Energy Regulator
In May 2018 we said there was enough capacity built or committed to meet the 2020 Large-scale Renewable Energy Target. From May to December 2018 there was an additional 3766 megawatts of firmly announced projects.
Photo: Capital East Solar Farm, NSW
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The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.