Australian clean energy investment sees major drop

The latest report from the Clean Energy Council reveals the country’s energy transition has been 'throttled by years of policy uncertainty', CEO Kane Thornton says.

Investment in Australian clean energy projects fell by almost 60 percent during the previous quarter, the Clean Energy Council’s latest renewable projects report has found.

According to the organisation’s Q3 Renewable Projects Report, investment into clean energy projects fell to A$418 million ($279.5 million; €269.9 million) for the quarter ending 30 September, representing a 59.3 percent drop compared with the previous quarter’s investment (A$1.026 billion), and a 75.8 percent drop compared with Q3 in 2021 (A$1.724 billion).

During the same period, only one new project – the 400MW Stubbo Solar Farm in New South Wales – reached financial close, down 169MW compared with the previous quarter and 683MW lower than the same quarter last year. As a result, the rolling quarterly average of financially closed new capacity over the past 12 months fell by 28.7 percent to 426MW, its lowest level since 2017.

Of the new financially committed projects and capacity over the past 12 months, New South Wales was found by the report to have contributed the most, with eight projects representing 65 percent of new capacity. This was followed by Victoria (six projects accounting for 19 percent of capacity), Queensland (six projects, 6 percent capacity) and Western Australia (three projects, 4 percent capacity).

One high point revealed in the report was a new record for investment commitments in large-scale storage projects, with 14 new projects worth more than $2 billion committed over the past year. In addition, the 12-month rolling average of energy output from utility-scale storage reached a record high of 1984MWh during Q3, almost four times the average during the same period a year ago.

In a statement, Clean Energy Council chief executive Kane Thornton said: “This report … makes it abundantly clear that Australia’s clean energy transition has been throttled by years of policy uncertainty, with just one project reaching financial close this quarter and the amount of quarterly commissioned capacity continuing the downward trend of the last few years and now at its lowest level on record at 127MW.

“Industry confidence to invest is growing, aided by clearer and more potent policy directions across the country, but the investment trend over the past year shows that we need a sustained focus on the energy transition from [Federal and State] governments.

“Reform of the energy market must continue apace to ensure stronger investment signals and certainty and avoid any reforms that might undermine investment confidence.”

In April, the organisation’s Clean Energy Australia Report 2022 highlighted a significant fall in the number of Australian renewable energy projects in the pipeline. In a statement at the time, Thornton attributed the reduction to “continued policy uncertainty combined with the challenges associated with connecting renewable energy projects to the grid”.