Investments in renewable energy plants showed an “alarming” slowdown in 2023, with financial approvals for new solar farms shrinking more than a third while no new windfarms won backing, the Clean Energy Council said in its annual report.
The yearly results come as separate data revealed fossil fuel power stations expanded generation in the first two months of 2024 as heatwaves in the east of Australia sent demand soaring.
The renewable sector was increasingly split between “particularly poor” investment in large-scale plants while rooftop solar continued to spread and investments in batteries large and small were “storming ahead”, the council’s report found.
At the end of 2023, Australia had 56 renewable energy projects under construction, down from 72 a year earlier. These had a combined capacity of about 7.5 gigawatts, more than a fifth lower than the 9.5GW at the end of 2022, it said.
New investment commitments provided an “alarming statistic”, though, as such sign-offs were “a good signifier” of how the sector will perform in the future. All up, $1.5bn was secured for new projects in 2023, less than a quarter of the $6.5bn tally for 2022.
“There were no new financial commitments to utility-scale wind projects in 2023 (compared to six in 2022) – a disheartening situation that needs to be addressed,” the council said. The seven new solar projects with 912 megawatts of capacity last year was down from the 1.5GW in 10 solar farms in 2022.
On a rolling 12-month average, investment in the December quarter sank to the lowest level since the council began gathering data in 2017, dipping below $1bn.
Industry hopes of a turnaround in large-scale projects hinge partly on the federal government’s capacity investment scheme. The plan, to run from 2024 to 2027, aims to drive an additional 32GW of renewables and storage into the grid by 2030.
“It is crucial that the new policy provides increased certainty to investors and can bring in the enormous private sector capital that will be required,” the report said.
Slow approvals, though, including in states such as New South Wales, mean the decade-end target of supplying 82% of electricity by renewables will be challenging, Green Energy Markets said in a recent report.
Decarbonising the power grid was also intended to deliver much of the government’s legislated target cutting greenhouse gas emissions by 43% by 2030, compared with 2005 levels. Recent increases in electricity use driven by several heatwaves, though, suggest the industry will see a pickup in pollution in the first quarter of 2024 at least.
Coal-fired power station output in January and February was up 4% from a year earlier in the national electricity market to 20.776 gigawatt hours, according to figures supplied by the Australian Energy Markets Operator (Aemo).
Gas-fired generation was up 14% from a year earlier to 1.538GWh.
By comparison, grid solar was 18% higher than in January-February 2023, while wind generation was up 5%. Rooftop solar output increased 10%.
In New South Wales, Australia’s largest producer and consumer of electricity, the increase in black-coal generation was 10% and gas jumped 42%. Wind power was up 18%, grid solar 21% and rooftop solar 10%, Aemo said.
In 2023, renewable energy supplied a record 39.4% of Australia’s electricity, led by wind’s 13.4% share, the council said. Rooftop solar cracked a 10% share for the first time, reaching 11.2% ahead of solar farms at 7% and hydro’s 6.5% share.
About 3.7m households now have solar panels, with the 337,498 systems added in 2023 trailing only 2021’s record, the council said.
Another positive story was in batteries. At the end of 2023, 27 large-scale battery projects were under construction with a combined capacity of 5GW or 11GWh. That tally was up from 19 being built at the end of 2022 for 1.4GW and 2GWh. New financial commitments for big batteries also rose from 2022’s $1.9bn to $4.9bn last year.
About 56,000 households also had small-scale batteries at the end of 2023, up from 43,000 in 2022 and 37,000 in 2021, the report said, citing figures from SunWiz.
