Nation’s gigantic renewable energy transition stuck in the pipeline despite record investment
Australia’s renewable energy investment has hit record levels, but mounting delays in project approvals threaten to derail the nation’s ambitious clean power targets.
Australia’s renewable energy transition is showing record investment, but a growing number of projects are now tied up, according to the latest data from the Australian Energy Market Operator.
The federal government is expected to seize on the headline figure as proof its policies are driving investment, but the data highlights challenges turning planned projects into operating capacity – a potential hurdle for the federal plan to generate 82 per cent of the nation’s power from renewables by 2030.
The issue of stalled projects has already sparked concern from industry. On Tuesday, Tomago, Australia’s largest aluminium producer, pointed to delays in new renewable energy development as a key reason the plant may be forced to close after its current electricity contract expires and energy costs make continued operation economically unviable.
It said its future could be ensured if it could source renewable energy to qualify for a green aluminium production credit but it cannot find enough zero-emission capacity for years to come.
AEMO’s data shows there are 56 gigawatts of renewable energy projects at various stages of development, and zero-emission sources are increasingly feeding into the grid.
AEMO onboarding and connections group manager Margarida Pimentel said the growing number of projects reflected strong momentum across governments and industry to deliver new energy capacity and support a reliable power system.
“The latest insights show a strong and growing pipeline of new energy projects entering the market to meet consumers’ growing electricity needs,” Ms Pimentel said.
“During the three months to September, six projects totalling 1.6GW completed full output, while a further 2.4GW of staged capacity has been released from projects working towards full output.”
Yet progress may be slowing. In the three months to September 30, AEMO approved just eight new applications from renewable developers seeking to connect to the grid.
That compares with 18 projects approved in the previous quarter, representing 15.7GW of capacity – a sharp fall in approvals since the start of the new financial year.
While some analysts say the drop may reflect developers rushing to lodge applications before the end of the previous financial year, it also raises concerns about the sustainability of the renewable pipeline. Projects can often take more than 12 months to secure access to the national electricity market.
AEMO data indicates more than half of implementation-stage projects have been stalled for over a year, reflecting structural bottlenecks in grid connections that threaten to slow the pace of deployment.
Industry figures said changing trends in the types of projects connecting to the grid was a key reason for the delays.
Some projects once earmarked for wind turbines were exploring the potential to switch to solar and batteries due to the high cost of wind turbines.
However, encouraged by market signals, relatively straightforward planning approvals and rapidly falling costs, batteries are increasingly dominating new connections.
Batteries now account for the majority of applications and registrations. While they add needed capacity, they provide limited generation beyond the typical four to six-hour duration.
Still, the rise of grid-forming batteries is seen as essential to stabilise the grid as intermittent sources like wind and solar expand. That importance was underlined on Tuesday when AEMO intervened in NSW, ordering Snowy Hydro to activate its synchroniser at a pumped hydro facility to maintain system security after the Vales Point coal power station incurred a technical fault.
The coal-fired plant, already operating at half capacity for planned maintenance, experienced a tube leak in its second unit, highlighting the ongoing reliance on both coal and new energy technologies to keep the lights on.
Industry insiders say the combination of stalled projects, the dominance of short-duration storage, and ongoing coal dependence shows the transition, while ambitious, is vulnerable to delays and technical disruptions.
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