How is Australia Managing the Transition to Renewable Energy?
In Australia, we're seeing enormous opportunities and some policy challenges in renewable energy.
While in Rome for the IBA conference, our team on the ground hosted a panel session, alongside representatives from Austrade, the Department of Foreign Affairs & Trade, and Gianni, Origoni, Grippo, Cappelli & Partners, that explored growth and investment hotspots in Australia – including renewable energy as well as some of the policy developments, including in relation to the National Energy Guarantee.
Australian National Energy Market governance was relatively stable over the last 11 years until relatively recently. A range of factors supported market trends towards increased renewables, including:
Government focus turned to renewables
Following the South Australian blackouts in late 2016 and subsequent Finkel Review, which looked at the 'future security of the electricity market’, Federal, State and Territory governments turned their focus towards renewable energy including how to balance the right mix of renewables with traditional generation, whilst balancing reliability, price and emissions demands.
Now, we're seeing an upsurge of important opportunities for investors, with almost all of the new generation of investment being renewable, including solar, wind power, batteries, pump storage and others.
We need investment to meet renewable targets
Despite execution challenges, opportunity is ripe for investors, including foreign investors – Australia needs more investment in renewables to meet targets set by various levels of Governments in Australia. Renewable targets (in the Commonwealth, State & Territory governments) are driving increased investment in large scale renewable energy projects in Australia. However, additional increased investment in large scale renewables is still needed, and more rapid uptake of innovative market mechanisms is needed to increase investment in large scale renewables to meet our renewables targets.
Some signs of innovative market mechanisms are emerging with an increase in the number of committed renewables projects and funding, the use of non-traditional financing structures by existing projects under construction and new financial products and procurement processes emerging. These are all positive signs for further renewables development.
Partners Clay Wohling and Mark Carkeet have explored how Australia is managing the transition to renewables, and provide an overview of the now defunct National Energy Guarantee (NEG).