Australia
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Households boost renewable supply, but big projects dwindle

Households are on track to add a record amount of rooftop solar capacity to the electricity grid this year even as large-scale renewable energy investments dwindle in the face of rising costs, transmission and planning bottlenecks for big projects.

Rooftop solar, which generated more than a quarter of Australia’s total renewable energy last year, is expanding even faster this year. Another 1.4 gigawatts was added to the grid in the first half of the year, the Clean Energy Regulator said, and total capacity for year’s end is tracking towards the 2021 record when 3.2 gigawatts were added to the system.

Just 0.5 gigawatts of large-scale renewables reached a final investment decision so far this year.

Just 0.5 gigawatts of large-scale renewables reached a final investment decision so far this year.Credit: Carla Gottgens

The regulator’s chief executive, David Parker, said in contrast to the uplift in small-scale renewables, the first half of the year was quiet for investments in new large-scale renewable energy projects.

​“We’ve downgraded our expectations and now expect 2023 investment may not reach 3 gigawatts,” he said. “There are a number of challenges to investment commitments for new renewable capacity, including higher costs, connection and permitting, and revenue certainty.”

As a result, just 0.5 gigawatts of large-scale renewables reached a final investment decision where investors are willing to kickstart projects.

Australia’s rollout of larger renewable energy projects is being delayed by opposition to powerline projects such as HumeLink in NSW and the Western Renewables Link and VNI West in Victoria, which locals fear will negatively affect the landscape, environment and their property values.

‘There are a number of challenges to investment commitments for new renewable capacity, including higher costs, connection and permitting, and revenue certainty.’

David Parker, Clean Energy Regulator chief

Thousands of kilometres of high-voltage transmission lines are needed to connect far-flung renewable energy zones to major cities, but the lack of investment in large-scale renewables will add to concern the transformation of the grid is faltering just as the country confronts an approaching wave of coal-fired power plant closures.

“Australians get that in a cost-of-living crisis solar absolutely makes sense,” said Wayne Smith, external affairs manager for the Smart Energy Council. What we need to do now is make it easier for businesses and big industrial facilities to also invest in rooftop solar, he said.

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Smith said planning departments, particularly in NSW, were “diabolically bad” at holding up large-scale renewable projects.

The regulator said solar systems being installed by homeowners were also getting bigger, with the average upsizing to 9.3 kilowatts as people try to reduce expenses. There has also been a 70 per cent surge in connections of air source heat pumps, an electrically efficient way of heating and cooling of homes.

A large step-up in investment is required to reach 82 per cent renewable energy generation by 2030, the regulator said.

Clean Energy Council chief Kane Thornton said a decade’s lack of leadership and planning had resulted in an “accumulation of these challenges that make it more difficult for investors to make those final decisions”. But he said there was still a legacy of large projects in the pipeline, and he didn’t expect investor appetite to wane over the longer term.