Resolving the complexity in our industry by Anthony Garnaut.
LinkedIn post by Anthony Garnaut, CEO ZEN Energy
The Clean Energy Council’s Renewable Projects Quarterly Report published at the end of last month confirms that we still need to resolve the complexity in our industry.
While we didn’t repeat the dismal result of the first quarter when zero (yes zero) projects achieved financial close, the numbers weren’t big. A total of 0.5TWh of renewable assets reached financial close in the quarter while we need a run rate of over 4TWh per quarter to hit our 82% target.
Within the dismal numbers, it was nice to see a contribution coming from the most remote corner of the grid – Kudos to Jeff Dimery and Ken Woolley at Alinta Energy for contributing 45MW of solar with a paired battery. This is part of the Port Hedland Hybrid Project, which was scooped up with other assets by the APA Group on the same day as the CEC report was published. The Pilbara is the largest source of Scope 3 emissions in the world. It will require many thousands of solar projects of this size to convert the Pilbara’s iron ore output into steel in a net zero world.
Over half of the investment dollars went into battery projects, for which supply chains are easier to manage, market price signals are more compelling and governments are more willing to roll up their sleeves. Full credit to Daniel Westerman at Australian Energy Market Operator (AEMO) for tipping the scales of the business case for Neoen’s Collie battery by awarding a capacity services contract. This follows the commitment two quarters prior from James Hay and the team at EnergyCo to help close Akaysha Energy’s Waratah Super Battery, the world’s biggest project which moved into construction this quarter.
Generation investment, including both renewables and storage, continues to trend downwards with this quarter being one of the worst on the CEC’s record (since they started tracking in 2017). Only 9 projects reached final commissioning – and the average build time for these was 25 months.
I agree with the Clean Energy Council’s Kane Thornton that the key to speeding up this process is for Australian organisations to think and act on a global stage. Some pointers on how to do this that I have highlighted previously are:
SUPPLY CHAIN: Review foreign investment settings to not exclude renewable energy construction firms from setting up in Australia without good cause;
ENERGY MARKETS: Extend the RET to 2040, so investors can include post 2030 green revenues in their investment cases;
CUSTOMER BEHAVIOUR: Introduce mandatory climate disclosure requirements for all large organisations in the next 12 months.
“There is an enormous pipeline of renewable energy projects in Australia, but investors are swamped with global opportunity at a time where these barriers make Australian projects less attractive.” Kane Thornton.