Lack of Clear Renewable Energy Policies from the Australian Government

A lack of clear renewable energy policies from the Australian government and difficulty getting approval from the Australian Electricity Market Operator to connect new projects to the nation’s grid have many renewable energy developers ready to pull the plug on further investments in Australia.

According to PV Magazine, during a webinar put on last week by Australia’s Smart Energy Council, government relations manager Wayne Smith said, “They’re done. The sovereign risk in Australia is too great.” During the presentation, Oliver Yates, the former CEO of the Clean Energy Finance Corporation, said the combination of curtailments and connection failures, together with arbitrary rules governing access to Australia’s transmission network, are all creating “an environment that is starting to become uninvestable.”

He went on to say that after a decade of gibberish from the federal government regarding renewable energy policies, the whole process is “unable to be understood by participants.” Business needs to be able to assign and assess risk accurately in order attract investors. The participants in the webinar warned current policies make it impossible to do so.

Downer Group Pulls Out

Just last week, Sydney-based contractor Downer Group — which is involved in building the largest solar power plant in Australia — announced it will no longer bid to build solar farms. “We’re out of solar,” Downer CEO Grant Fenn said after delivering the company’s half-year earnings on Wednesday. He said Downer’s decision to pull out of solar was “disappointing but inevitable” given the dearth of new investment. Investments in solar farms fell to $1.2 billion last year after peaking at $3 billion in 2018.

The reduction in new spending on large scale solar projects is the result of mounting regulatory risks, under-investment in transmission, and a policy vacuum for what will happen at the federal level after this year. According to Fenn, the situation in the market is dire with developers, contractors, and bankers trying to wrap their heads around grid stability issues, risks associated with transmission losses, grid instability, equipment performance matters, and connection problems. “These problems will no doubt be sorted out in time, but right now we don’t see a construction market in the short to medium term that will accept our terms and risk position on these matters,” he said.

John Grimes called for the SEC webinar after the Australian Electricity Market Operator elected to curtail renewable generator output to the grid. Earlier this month, it refused to connect several new solar and wind farms due to system strength issues in southwest New South Wales and Victoria — despite the fact that developers had followed due process and been assured of grid connection.

Multiples of renewable capacity required

“The industry has the ability to deliver what Australia needs which is rapid build out of renewables,” said Oliver Yates. He emphasized that Australia will require not only 50% renewable energy by 2030 as the Government has been conceding, but 100% and then 200%. “We have to deliver multiples of what we have. The Government talks about having an investment pool, to enable us to make this transition clearer. Why it isn’t using that to clear bottlenecks to enable good-quality, low-cost renewable-energy projects to come to market is beyond me,” said Yates.

Government obfuscation and failure to act, he said will delay Australia’s energy transition, “making power more expensive for all consumers, including industrial consumers, which affects the nation’s overall competitive position.”

Wayne Smith told the webinar the Smart Energy Council must ramp up its political action initiative. “It’s about … taking AEMO, AEMC and Government processes out of the dark rooms that they’re in at the moment,” and shining a light on the cumbersome complexities that stymie investment, development, and delivery of energy Australia needs, he said.

If The People Will Lead…..

There is an old expression that goes like this: “If the people will lead, their leaders will follow.” Australia’s federal government, from Prime Minister Scott Morrison on down, is clearly nothing but a shill for fossil fuel and mining companies. It engages in the same embarrassing rationalizations we hear from leaders in Alberta and British Columbia. “The economy is founded on burning fossil fuels and extracting minerals. Nothing can be allowed to interfere with that, even if it means the Earth will become uninhabitable for humans. Let the future worry about the future. Today, there’s money to be made and we will gladly sell those future generations down the river to make sure it winds up in our pockets.”

The primary question is, when will people stop voting for false leaders who govern in their own self interest and not in the best interest of the country and the human community? Australia has only a few years left to answer that question before it’s too late.


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