Australia’s must not squander advantage by abandoning 2030 energy transition targets: Acciona Energia

Any policy shift away from 2030 energy transition targets would squander Australia’s advantage and see regional communities miss out on economic opportunities, an energy industry leader warns.

Australia must continue with its 2030 energy transition targets or risk missing out on large amounts of offshore capital that will provide an economic boost to regional communities, the boss of Acciona Energia – one of the country’s largest renewable energy developers – has urged.

The comments underscore alarm within Australia’s renewable energy industry about the Coalition’s proposal to abolish the 2030 targets. Opposition Leader Peter Dutton has said the targets should be abandoned as Australia is unlikely to meet them.

But Acciona Energia managing director Brett Wickham said the prospect of axing the targets was extremely dangerous as it would reduce the appetite of energy companies and major users for offtake agreements, which in turn decreased the appeal of Australia for offshore investors like ­Acciona.

“Put simply, capital will flow to other countries,” Mr Wickham told The Australian. “Acciona operates in numerous countries, all of which are desperate for investment.

“If we can’t deploy it in Australia then another country definitely will.”

Offtake agreements provide revenue certainty to developers and are typically agreed to before construction is approved.

ACCIONA Energía’s MacIntyre wind farm under construction in Queensland.

The warning will heighten alarm within the energy industry and policymakers. The Australian Energy Market Operator has warned the country must urgently develop new sources of renewable energy or face shortages and the pressure shows no sign of abating.

AEMO expects the country’s coal power stations to have stopped operating by 2037. NSW has already been forced to extend the lifespan of its largest coal power station, Origin Energy’s Eraring, but sources said many traditional generators were already approaching the end of their lifespan and extending them may not be feasible.

Mr Wickham said the policy shift was not yet changing investment decisions but multinationals like Acciona were playing close attention.

“Head office is starting to ask questions like ‘what’s happening in Australia? Are we going to have one of these silly 180 degree turnarounds?’ Which is not what we want,” said Mr Wickham.

“We’ve built up a certain amount of momentum, and if you slow this down, it’s going to take a long time to build it up again.”

The federal government and its state counterparts insist Australia is making progress towards its target of having renewable energy generate more than 80 per cent of the country’s electricity by 2030. It acknowledges progress has been slower than expected says but momentum is building.

The changes are not universally popular, and the Coalition policy of building seven nuclear power stations has won favour in some parts of regional Australia.

Some opponents insist the cost of building 100,000 of new high voltage transmission lines is too high.

Brett Wickham, managing director of Acciona Energia

Recent data from AEMO shows the cost of producing electricity across the national market averaged $133/MWh in the three months to June 30, 23 per cent higher than the same period a year earlier.

Several states endured massive price spikes during the quarter, a separate study by the Australian Energy Regulator showed. Tasmania’s wholesale price soared 110 per cent to $71/MWh compared with the same period a year earlier while Victoria jumped 45 per cent to $96/MWh and NSW lifted 28 per cent to $41/MWh. Queensland bucked the trend, falling 22 per cent while South Australia edged up 9 per cent.

Mr Wickham, however, said the argument for the transition is not solely emissions reduction.

“This isn’t just about emissions – it is also about creating economic activity in regional and rural Australia,” he said.

“Look at our Macintyre development. We have had between 450 and 1000 jobs during construction for the last two or three years and now we are going to have around 40 jobs during operations for the next 30 years.”

Mr Wickham said the benefits went further, with Acciona placing substantial orders for components in the neighbouring communities, which would support other families.

Macintyre is Acciona’s largest renewable energy investment in Australia. The 1GW, 180-turbine Herries Range wind farm will soon be operational.

Originally published as Australia’s must not squander advantage by abandoning 2030 energy transition targets: Acciona Energia