Australia ‘set to achieve over 50% renewable energy’ by 2030
Australia is on track to generate 52% of electricity in its National Electricity Market (NEM) from renewable sources by 2030, even if there are no changes in federal policy, according to a new report by energy analysis firm Reputex.
The uptake in renewables is primarily driven by state energy targets rather than federal policy, says Reputex.
Around 3 GW of wind and 3 GW of solar capacity is currently committed for development in the NEM by the end of next year, adding to the existing 27 GW renewable capacity. Rooftop solar installations will form a key part of expected future renewable capacity, representing around half of the capacity needed for the NEM to reach 50% renewable energy by 2030.
There will be a growing need for energy storage solutions to support the growing capacity, with pumped hydro storage expected to meet Australia’s needs. Reputex points to the Snowy 2.0 hydro project in New South Wales, which aims to add 350 GWh of energy storage capacity, as a future solution.
The report suggests that the new low-cost supply gained through the uptake of large-scale renewables and rooftop solar power may significantly limit demand for coal-fired energy. It may also reduce wholesale energy prices, from around A$85/MWh to A$70/MWh over the next three years.
However, the absence of a federal energy policy framework to incentivise new investment prior to large coal-fired generation retirements could force wholesale prices back up in the long term and increase price volatility in the future, notes Reputex. This could lead to a slowdown in energy investment and a return to a boom-bust renewable energy investment cycle.
Currently, the coalition government has no plans to renew or replace the Renewable Energy Target (RET) scheme – which aims for 23.5% of Australia’s electricity generation to come from renewable sources by 2020 – after it expires in 2020.