Unprecedented investment in wind and solar power puts Australia on track to meet its 2020 renewable energy target, the sector’s regulator believes.
The Clean Energy Regulator’s report on 2016 investments, released on Wednesday, says 98 new large-scale renewable energy plants were accredited last year, the vast majority of them solar farms.
And $4 billion was committed to building new projects, more than in any single previous year.
The regulator says this building momentum puts Australia in a strong position to meet the legislated target of having 23.5 per cent of energy generated from renewables.
The momentum has continued into 2017, with one-third of the total build required for the year achieved within the first three months.
However chair Chloe Munro cautions that while the target is achievable, 2017 will be a critical year, particularly with the heated political debate surrounding reviews of energy market security and climate policy.
“It is possible the tenor of public discussion around these reviews may unsettle investor confidence before any policy decisions are made,” she writes in the report.
But on the whole, she believes investors are more likely to remain positive.
She notes the regulator was worried in mid-2016 that the sector still hadn’t recovered from the two years of uncertainty around the RET, but investment bounced back in the later part of the year.
Both Clean Energy Council head Kane Thornton and Australian Energy Council boss Matthew Warren said support from state and territory governments had played a large role in reducing costs and restoring confidence to the sector.
Mr Thornton said the price of large-scale solar had halved over the past few years, making it competitive with not just wind power but fossil fuels such as gas.
“Renewable energy is now the cheapest kind of power generation it is possible to build today, and solar power plants have a relatively short project lead time compared to other technologies,” he said.
Australia now has the highest penetration of rooftop solar in the world, with 2.6 million households having a system, and has returned into the top 10 global destinations for renewables investment.
Energy Minister Josh Frydenberg noted in a speech to the Carbon Market Institute the “dramatic seachange” in the cost of large-scale solar systems had led to more investment.
“When it comes to renewables – and this is absolutely critical to the power generation sector, which makes up a third of the country’s emissions – there is an irreversible transformation taking place,” he told the conference in Melbourne.
However, Mr Warren warned there was still much to do to avert an energy crisis.
“More renewables are part of the solution, not the solution itself,” he said.
“We still need a durable national energy and climate policy that unlocks all types of energy investment and allows the market to coordinate energy technologies to deliver reliability and lower emissions at the lowest cost to consumers.”