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In September 2019 a wind farm project in Tasmania helped Australia to reach its renewable target — we have, collectively, fulfilled our Large-scale Renewable Energy Target. Some took this opportunity to praise the government’s record investment in renewable energy was world-leading.
Some took this opportunity to claim we had over-invested in renewable since we had so ‘easily’ reached the target. Some still took this opportunity to claim that investment in renewable energy was not slowing down. Let’s take a closer look at this.
Have we over-invested in renewable energy?
According to a recent RenewEconomy article speaking about Federal energy and emissions reduction minister in relation to the question of whether Australia has over-invested in renewable energy, “No. Minister Angus Taylor clearly hasn’t looked at the history of our electricity infrastructure. Renewable energy policy has been poorly designed, to some extent because of politicisation, and to some extent because no-one imagined it would grow this fast, driven by astounding cost reductions and technology developments.”
Is investment in renewable energy being maintained?
No, despite some claims, investment in renewable energy in Australia is slowing down. The current government has previously stated that they will not extend the now reached target. Since this is the national mechanism which supports renewable energy, a slow down in investment is already beginning. The evidence is in — investment in new renewable energy capacity is reducing. The latest data from Bloomberg New Energy Finance clearly shows a 21% drop in investment from 2018 to 2019 financial years.
Why is a reduction in renewable energy concerning?
Apart from the concern to the renewable energy industry specifically and for climate action generally, the reduction in investment will correlate with reductions in new additions in capacity. Development of products and services will become somewhat stagnant and more expensive.
What is being done and can be done to ensure consistent investment in renewable energy?
Here’s where the states and territories of Australia have an opportunity to step up. Individual states can implement their own renewable energy targets, over and above the national, which can and will encourage more investment in renewable energy across the board.
The achievement of the renewable energy target leaves a federal policy void. Renewable energy may now be the lowest-cost source of new electricity supply.
But it is competing against assets such as coal-fired power stations with sunk costs — meaning that new renewables projects are essentially competing with only a coal plant’s fuel costs. The absence of a price on carbon or similar policy, coal assets are allowed to pollute the atmosphere for free.