Australia’s Succeeds in Its Efforts to Promote Clean Energy

Australia’s transition to a clean electricity system is closer than ever, and the nation is now building the critical foundations that will deliver a transformative acceleration in renewables, according to Clean Energy Council (CEC).

In its report entitled “Clean Energy Australia 2024,” the CEC said that it was the time to ride the wave of policy ambition and turn Australia’s huge pipeline of ‘prospective’ projects into ‘built’ projects.

CEC’s Chief Executive Kane Thornton said that there was a wave of ambitious policy decisions at federal and state levels aimed at accelerating momentum for the sector, meaning 2024 and beyond will be pivotal years for clean energy.

The announcement of the Australian Government’s expansion of the Capacity Investment Scheme, to support the addition of 23 GW of new renewable electricity generation capacity between 2024 and 2027 and a further 9 GW of dispatchable capacity, was intended to get large-scale investment back on track.

“There will however need to be urgent and careful policy design undertaken in the first half of 2024 to ensure the program realises its critical objective to turbocharge private investment in the coming years,” Thornton said.

Renewable energy provided 39.4% of Australia’s total energy generation in 2023, a 9.7% increase, from 35.9% in 2022. That was a remarkable achievement given renewables represented just 17% of Australia’s electricity in 2017, when strong investment really took off.

Combined large and small-scale renewable capacity added reached approximately 5.9 GW in 2023, a figure that almost topped the 2021 record of 6.3 GW, and was significantly up from 5 GW in 2022, the report said.

This included 2.8 GW from utility scale projects coming online, and 3.1 GW from rooftop solar. Utility-scale projects included 1.9 GW of large-scale solar capacity – up from 841 MW in 2022 – and 942 MW of wind capacity, down from 1.4 GW in 2022.

New Financial Commitments

2023 was also a record-breaking year for new financial commitments to large-scale storage. In Q2, investment in big batteries broke the billion-dollar mark during a quarter for the first time, and by Q4 that record had been broken.

Total investment in large-scale storage stood at $4.9 billion by the end of 2023, up from $1.9 billion in 2022 – a 157.9% increase. The combined capacity of the large-scale storage projects reaching financial commitment in 2023 totalled 3,949 MW, the report said.

On the other hand, Australia’s world-leading rooftop solar industry continued to flourish, driving Australia’s clean energy transition forward with the largest contribution (3.1 GW) of any technology, significantly up from 2022 (2.7 GW).

As many as 337,498 solar systems were installed across Australia in 2023, up from 315,499 in 2022. These are terrific numbers, and demonstrate the value Australians see in rooftop solar, as well as the benefits it brings.

However, 2023 saw a slowdown in new financial commitments to utility scale generation capacity at $1.5 billion, significantly down on $6.5 billion for 2022.

“This reflects a more complex and challenging landscape for new investment decisions, which continue to include a constrained grid, slow planning and environmental assessment processes in some jurisdictions, higher costs and tighter markets for equipment and labour,” Thornton explained.

 The policy environment has also been uncertain, with a long-term Renewable Energy Target which is scheduled to wind-up at the end of 2030.

In its Draft 2024 Integrated System Plan, the Australian Energy Market Operator (AEMO) advised Australia will need to add at least 6 GW of utility scale generation to the National Electricity Market annually to meet the Federal Government’s target of 82% renewables by 2030.

While 2.8 GW of new capacity across all of Australia in 2023 is a solid number, Australia clearly needs a rapid acceleration in investment and deployment, the report added.