Investor confidence in Queensland renewables wanes amid policy uncertainty

A series of policy interventions by the Queensland government means would-be developers now see greater opportunity elsewhere – a trend that threatens the state’s transition plan.

The Clarke Creek Wind Farm project in Queensland.

Queensland’s once-golden reputation as Australia’s premier destination for renewable energy investment is beginning to tarnish, with some of the nation’s largest zero-emissions developers cooling on the state following a year of regulatory upheaval and political intervention.

According to the latest annual survey from the Clean Energy Investor Group (CEIG), whose members are behind more than 11 gigawatts of renewable energy projects across Australia, NSW has now overtaken Queensland as the most attractive jurisdiction for new investment.

The findings illustrate the impact of a string of policy shifts and planning delays under the newly elected Liberal government led by Premier David Crisafulli, which threaten Queensland’s energy transition plans.

Richie Merzian – chief executive of the Clean Energy Investor Group – said the impact of policy interventions has been stark.

“The recent legislative changes and uncertainty in Queensland have weighed heavily on investor confidence, despite the Queensland government’s claims it remains open for business,” Mr Merzian said.

For much of the past decade, Queensland had been viewed as a national leader in renewable energy development. The state’s ambitious clean energy targets and relatively development-friendly planning laws attracted billions of dollars in investment, particularly from international offshore wind and solar developers seeking to tap into its vast natural resources.

But since the election of Mr Crisafulli’s government, momentum has stalled. Several large-scale renewable projects have been put on hold or sent back for fresh rounds of consultation. A new suite of environmental and planning laws — designed to increase the social licence requirements of clean energy developers — have been implemented, fuelling frustration and uncertainty among investors.

Acciona's MacIntyre wind farm in Queensland.

In contrast, NSW – long criticised for its onerous planning regime and bureaucratic delays – has taken steps to clear the decks for new clean energy investments and recent data shows the state is now pulling away in transitioning away from coal.

Planning reforms rolled out in recent months have simplified approval pathways for renewable developers, particularly for those involved in the state’s renewable energy zones.

The shift in investor sentiment comes at a critical time for Australia’s energy transition. Both federal and state governments are banking on a rapid build-out of renewable energy capacity to replace ageing coal-fired power stations and meet 2030 emissions targets. But clean energy developers have repeatedly warned that political and regulatory uncertainty remains the single largest barrier to meeting those goals.

Waning investor confidence would be consequential for the states. Both NSW and Queensland have set ambitious renewable energy targets as they look to replace retiring coal power stations and securing private sector investment will be critical.

Queensland is Australia’s most coal dependent state, and any hint that investors are pulling back from new developments would risk the state’s transition goals. The state government is expected to release a five-year energy road map at the end of the year.

Any shift to NSW would aid the state’s own transition plan. The state has earmarked a rapid shift to renewables to meet its target of reducing emissions by 70 per cent from 2005 levels by 2035.

To meet its target, NSW has earmarked five so-called Renewable Energy Zones - where large-scale wind, solar and batteries will be concentrated. New transmission lines to connect the zones to the grid are underway, providing more confidence among would-be investors.

Originally published as Investor confidence in Queensland renewables wanes amid policy uncertainty