Comment, Renewables

New year, new growth: What to expect from clean energy in 2023

Clean Energy Council chief executive Kane Thornton dusts off the crystal ball to predict the trends that will shape the clean energy industry in 2023.

Last year was a mixed one for the electricity sector. On the plus side, the Federal Election created a far more positive political environment for clean energy, and several major coal closure announcements further accelerated Australia’s clean energy transition.

On the other hand, increasingly unreliable coal generation and record high gas prices pushed the energy system to breaking point, while supply chain and workforce constraints saw the small-scale solar sector’s run of record-breaking years come to an end.

As we head into another new year, the clean energy industry sits on the cusp of a new boom, with an increasingly urgent need to bring forward new generation and storage investment. However, skyrocketing energy prices and a lack of investment confidence continue to loom large over the sector.

What impact will these factors have on clean energy in 2023 and what will be the key trends and developments affecting the industry throughout the year?

Rooftop solar to bounce back strongly

The rooftop solar sector experienced a slight downturn in 2022 as supply chain issues, ongoing COVID-19 complications and challenges securing the workers necessary to install systems saw annual installed capacity fall below the record high of more than 3GW set in 2021.

However, the sector bounced back strongly in the latter part of 2022 due to the spike in electricity prices, which is a trend likely to continue into 2023 as more businesses and households seek to reduce their eyewatering electricity bills with solar. Last year’s slight market softening is unlikely to be the beginning of a wider trend, with high expectations the sector will return to its record-breaking ways in 2023.

The Clean Energy Council will be doing everything it can to make sure this happens. Starting in March 2023, we will be leading Solar Month, a celebration to promote the benefits of rooftop solar, educate consumers and provide lots of interesting rooftop solar-related events and content.

Early 2023 has also seen the launch of the New Energy Tech Consumer Code (NETCC). The NETCC is an industry initiative that expands the consumer protection standards offered to rooftop solar customers through the Approved Solar Retailer program to other existing and emerging technologies, including microgrids, energy management products, household batteries and electric vehicle chargers. The Approved Solar Retailer program has been a significant contributor to the rooftop solar industry’s recent success, and its legacy will be continued and expanded upon via the NETCC.

The Clean Energy Council will also be continuing to work throughout 2023 on a robust product stewardship scheme for the solar and battery sector, addressing and responding to modern slavery and strengthening the Australian clean energy supply chain to ensure Australia not only maintains its position as a world leader in rooftop solar, but extends its leadership to the entire solar value chain.

State-led large-scale generation revival

There is likely to be a resurgence in large-scale clean energy project commitments in 2023 as supportive federal and state government policies boost confidence and revive project development around the country.

The Electricity Infrastructure Roadmap in NSW has already begun to tender for the gigawatts of new renewable energy generation that will be built across five renewable energy zones, which will continue throughout 2023. While the construction of these projects will ramp up considerably in subsequent years, this year is likely to see the first trickle of projects begin to reach financial commitment.

In 2023, Victoria will also see the successful projects in its VRET2 auction begin to move through the project pipeline as the state strives to achieve its target of 40 per cent renewable energy by 2025.

Queensland’s Energy and Jobs Plan, which was released in 2022, forecasts the state will get 30 per cent of its electricity from renewables by the end of the 2023-2024 financial year. With the state currently sitting at 21 per cent, this will require significant deployment of new generation throughout 2023.

These government programs, plus the increased confidence of private investors due to the Federal Government’s support for renewable energy, is likely to see an uptick in new project announcements this year as states and territories build momentum towards the masses of new generation that will be required to meet their increasingly ambitious targets and replace coal and gas as their exit from the electricity sector quickens.

Big growth is anticipated in rooftop solar in 2023, especially in light of steeply rising energy bills. Photo: Getty Images.

Modernising the grid with transmission and storage

The close of 2022 saw investment commitments in large-scale storage projects reach a record high, with 14 new projects worth more than $2 billion committed during the year. This growth will continue in 2023 as more storage capacity is added to support the new generation coming online and provide vital grid stability services ahead of the closure of coalfired power stations.

The investment is likely to come in equal measures from government and the private sector. On the government side, all states in the National Electricity Market will continue to increase their focus on large-scale storage, investing in batteries as part of their long-term strategies to decarbonise their electricity systems.

Private investors will also increasingly look to add value to their new wind and solar assets by including batteries in the project scope, and building standalone systems to take advantage of the lucrative frequency control and ancillary services revenues on offer to energy storage systems.

Long-duration storage, such as pumped hydro, is undergoing a renaissance in Australia and will be prominent in 2023, with significant new announcements or milestones expected as governments and developers begin work on these important projects that will come online later this decade.

With more than 10,000km of new transmission infrastructure needed to support Australia’s clean energy transition, expect to hear a lot about towers, poles and wires in the months ahead. The Albanese Government has already made commitments under its Rewiring the Nation program, including Marinus Link and VNI West, and more will be announced in 2023 to support the new generation and storage needed across the grid.

Additionally, several transmission programs are expected to be completed in 2023 – including VNI Minor, Eyre Peninsula Link and QNI Minor – while several others on the Australian Energy Market Operator’s Actionable Projects list could be brought forward.

Making predictions in the fast-moving clean energy sector is always fraught with danger. The need to decarbonise our energy system means it is difficult to come to any other conclusions. With a favourable political situation, strong public support and an improving investment environment, the Australian renewable energy industry has never had a better opportunity to accelerate the clean energy transition.

Now it is time to get on with the job and make 2023 the year our journey to becoming a global clean energy superpower takes off.

Send this to a friend