Green investors tip renewable energy revival
Anthony Albanese‘s pledge to make Australia a renewable “superpower” may spark a spending surge in new green projects as confidence returns to the sector, major clean energy investors said.
The Clean Energy Investor Group, whose members control $24bn of energy generation across 70 power stations, said Mr Albanese‘s win would help turbocharge spending given Labor’s plan to boost the share of renewables in the national electricity market to 82 per cent by 2030, nearly triple current levels.
Financial commitments for new large-scale renewable energy projects fell 17 per cent last year to $3.7bn due to policy uncertainty and grid connection issues.
“Australia has suddenly re-emerged on investors‘ radars. The election outcome is deeply consequential for clean energy investment opportunities in Australia. The message from the incoming Prime Minister is clear. He wants Australia to be a renewable energy superpower. And that will send an enormously positive signal, right across the sector, about the opportunity in the Australian market,” CEIG chief executive Simon Corbell told The Australian.
“We now have a national government that will not simply grudgingly accept the energy transition, but which will enthusiastically embrace it. And that‘s enormously positive for investor sentiment.”
Labor’s $20bn Rewiring the Nation fund to ensure the grid is rebuilt to accommodate growing sources of solar and wind will be critical for Australia to hit the ambitious 2030 renewables target.
Over $12bn of power transmission projects are required to be built over the next decade to keep pace with a rapid influx of renewable energy and storage in different locations to the big coal generators that have historically provided the bulk of supply.
“There are billions of dollars worth of capital waiting to invest in the Australian market. There is more capital than there are projects. And the challenge is getting projects ready, so that they are investable, and that‘s really been the main blockage that we’ve been facing in the market to date,” Mr Corbell said. ”And that’s driven by the problems around grid access and congestion primarily.”
Labor’s energy spokesman Chris Bowen has been
critical of the current investment test for transmission, known as the RIT-T, saying it can delay projects unreasonably and has called for a major reworking of the scheme.
The industry has also grown frustrated that funding
barriers and issues with the default regulatory investment test were stifling Australia’s clean energy transition at a critical time for the sector.
Executing reforms will now be needed to ensure investors are on board, the CEIG said.
“The detail is going to be critically important. Investors will be looking very closely at the detail of Labor’s implementation program, and its willingness to get to grips with some of these really difficult issues of market design,” Mr Corbell said.
“But the signal is clear. And the signal is what we need first and foremost, from the top and from the new leader of the government, he wants us to be a renewable energy superpower. And we will now be looking to see that translated into the reforms that are needed to unlock the capital that‘s required.”
Labor campaigned on a 43 per cent emissions reduction cut by 2030 compared with the Morrison government‘s 26-28 per cent goal, but Mr Corbell does not expect Mr Albanese to immediately hike the target further amid pressure from independent and Green candidates.
“I think Albanese‘s leadership will be decisive, but cautious in that he won’t attempt to overreach. He will want to keep faith with the community and deliver what he has outlined,” said Mr Corbell, a former ACT Labor energy minister.
“The reality is that there will be pressure to go further, but I think Labour will build a consensus to try and realise an even greater level of ambition over time.”
Clean Energy Council chief executive Kane Thornton said on Twitter that Australia just “took a big step toward becoming a global clean energy superpower” following the election result.
PERRY WILLIAMS SENIOR BUSINESS WRITER