Australia won’t be able to build enough renewables to hit 2030 target, NSW agency forecasts
Australia will not be able to build and install enough renewable energy generation to meet the country’s 2030 target, new modelling has shown.
Australia will not be able to build and install enough renewable energy generation to meet the country’s 2030 target, new modelling from a NSW government body has determined, amid concerns over supply constraints and labour shortages.
New modelling released by AEMO Services — the NSW agency which has been tasked with playing a major role in the state’s energy transition — said it believes the country could at most install 4 gigawatts of new clean energy capacity, compared with a 6GW target.
To meet green goals, the Australian Energy Market Operator said in December the country must establish 6GW of renewable energy into the system every year until 2030.
“The limit of 4GW was selected based on historical build of all large-scale technologies in the NEM from the last 10 years,” AEMO Services said.
“This updated approach reflects the fact that commodity, manufacturing and labour needs associated with these large infrastructure builds in NSW are also in demand in other jurisdictions to achieve their targets.”
The Albanese government has set an ambitious target of having renewable energy generate more than 80 per cent of the country’s energy by 2030, which it said will allow the country to meet legislated targets to reduce carbon emissions by 43 per cent.
The target has accelerated the transition and won favour with regional allies who have pushed for more aggressive climate change action, but some worry the transition is too quick and too disruptive.
The country’s energy market operator believes coal generation — which remains the largest single source of electricity in Australia — will have exited the system within 15 years.
A failure to adequately replace the lost generation will add upward pressure on prices and stoke alarm about potential blackouts.
A spokesman for Energy Minister Chris Bowen said the AEMO Services forecast did not include recent policy from the government.
“The modelling doesn’t take into account the largest investment in energy underwriting ever made in Australian history – the Capacity Investment Scheme. AEMO themselves dispute the finding – including pointing to the record over 70 per cent instantaneous renewables that has already been reached in recent months,” the spokesman said.
“We know that the Capacity Investment Scheme puts us on track to meet needs of households and businesses by unlocking 32GW of energy – enough for around half the current National Electricity Market with its nearly 11 million customers.”
AEMO said investments in grid-scale renewables, building new transmission and firming technologies were gaining momentum, but required a hefty increase in volumes.
“To meet government policy targets, Australia needs to accelerate annual investment in new renewable generation from today’s 4 gigawatts to 6 gigawatts,” an AEMO spokesman said.
Bruce Mountain, director of the Victoria Energy Policy Centre, said he was very pessimistic Australia could even maintain its current pace of renewable energy build-out.
“I think 4GW is optimistic. I think arguably the infrastructure landscape has been easier in the past than it is in the future. All the spare transmission capacity has largely been absorbed, so the low hanging opportunities have been seized on,” said Mr Mountain.
Mr Mountain highlighted the risk of transmission delays. Australia must build around 10,000KM of high voltage transmission lines by 2050, but the rollout has been severely delayed amid local opposition.
Renewable energy generators will typically avoid making large-scale financial investments until they are confident they will be able to connect to the grid.
However, industry sources said the AEMO Services report critically does not reflect government schemes to drastically increase new renewable energy generation, model the rapid uptick in rooftop solar and allow for generation capacity installed outside of government schemes.
In a bid to accelerate the rollout of renewable energy, Labor late last year promised to underwrite a massive expansion of 32GW of new wind, solar and battery projects and Squadron’s ambition would go a long way to meeting the goal of the government.
The so-called capacity investment scheme sees developers guaranteed a minimum return on new solar and wind projects.
Under the scheme, should the wholesale electricity price fall below an agreed threshold, taxpayers will compensate the renewable energy project. Should the wholesale electricity price exceed a metric, developers pay the government — a design which removes revenue risk from developers and accelerates much-needed investment.
Some renewable energy proponents have moved quickly to seize on the policy certainty.
Squadron Energy, Australia’s largest renewable energy developer — owned by billionaire Andrew Forrest — has promised to deliver more than a third of the solar and wind generation capacity the country must build by 2030 in a major boost to the country’s ailing energy transition.
Squadron Energy had pledged to build 14GW of new wind and solar capacity by the end of the decade, a substantial amount of the estimated 57GW authorities said must be installed by 2030.
Australia has around 19GW of wind and solar generation on hand.
More Coverage
