Chris Bowen’s market intervention to accelerate the rollout of renewables is a concession that Labor’s pre-election modelling was fanciful.
The Energy and Climate Change Minister is praying that his punt on underwriting clean energy projects will achieve Anthony Albanese’s promise to increase renewables in the grid to 82 per cent by 2030.
Bowen is locked in a 73-month race against time to slash emissions by 43 per cent and “supercharge” wind, solar, battery and pumped hydro capacity to replace coal and thermal generation by the end of the decade. With the government fumbling over fuel efficiency standards to support the take-up of electric vehicles, and finalising a 2035 emissions-reduction target to promote its bid to host a United Nations climate change conference, Bowen is under maximum pressure.
Ideological opposition to gas, nuclear and coal-fired power, delays in transmission upgrades to connect renewables, and growing regional opposition to offshore wind farms also spell trouble for Bowen. If the government fails to land its “clean-energy revolution”, Australian businesses and households face crippling blackouts and huge price spikes.
Other factors driving concerns around the renewables rollout include Australia’s reliance on China and other countries for components, including wind turbines and cables. The country is locked in fierce competition to access global supply chains, with marquee projects including the Marinus Link facing cost blowouts and delays.
Joe Biden’s centrepiece clean-energy fund – the Inflation Reduction Act, or IRA – is also hoovering up capital and making it harder for Labor to deliver on its promise to establish Australia as a “renewable energy superpower”.
The massive expansion of the Capacity Investment Scheme announced on Thursday is a signal that business as usual was not going to deliver enough renewables in time.
Proponents of large-scale renewable generation projects had warned the government about their concerns around returns on investment.
Without government guarantees on their investment and commitments to streamline approval processes, some would likely have shelved their plans and walked away.
After more than 28 years in politics, including almost two decades in federal parliament, Bowen is desensitised to slings and arrows directed at him. However, he knows that failure is not an option given the high stakes for energy users … and lingering leadership ambitions.
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