New investment in renewable energy projects such as solar and wind farms has plunged to levels not seen since Tony Abbott was prime minister, risking power price rises and future energy reliability, the Clean Energy Council says.

Clean Energy Council CEO Kane Thornton said following the good news last week that the 2020 large-scale Renewable Energy Target would be met, there is currently no energy and climate policy to replace it – giving pause to many major investors.

The Clean Energy Council has released a policy briefing paper which shows quarterly financial commitments in new renewable energy projects reached a high of over 4,500MW in late 2018, but have since collapsed to less than 800MW in each of the first two quarters of 2019.

“With Australia’s coal-fired power stations ageing rapidly, it is essential new clean energy projects are built now to ensure lower power prices and improved reliability when these old clunkers retire from service,” Thornton said.

The analysis in Australia’s clean energy generation investment outlook finds that while large-scale renewable energy no longer needs subsidies, long-term policy certainty and regulatory reform are crucial to giving confidence to investors.

In its report the CEC recommends:

  1. The Federal Government provide leadership and support the transition of the sector by proceeding with the National Energy Guarantee (or an equivalent policy) that will provide much-needed investment certainty.
  2. Accelerated reform of the transmission regulatory framework is essential to deliver the Australian Energy Market Operator’s Integrated System Plan.
  3. Accelerate reforms to support the deployment of energy storage, including streamlining of grid connection processes and requirements.
  4. Extend funding for the Australian Renewable Energy Agency (ARENA) beyond 2021.
  5. Build stronger leadership and cooperation with state and territory governments in accelerating regulatory reform to remove barriers for renewable energy and energy storage projects.
  6. Ensure transparency of the Commonwealth’s Underwriting New Generation Investment (UNGI) program in relation to the selection of projects to minimise the impact on market confidence.

More than 500MW of large-scale battery projects have already been financially committed, the CEC said, along with more than 9,000MW of pumped hydro potential which has been identified.

“This demonstrates that there is no shortage of potential from energy storage to support the continued deployment of variable renewable energy projects and to meet peak power load as ageing coal-fired power stations exit the system,” Thornton said.

“However investment in energy storage is challenging without market reform and clear policy that can reduce uncertainty and recognise the value that these projects provide to the energy system and market.”

A more detailed summary of the current state and future outlook for investment in renewable energy and energy storage can be found in the briefing paper Australia’s clean energy investment outlook, which is available on the Clean Energy Council website.