The renewable energy industry has shown remarkable resilience in a difficult year, writes Clean Energy Council chief executive Kane Thornton.
It’s fair to say that 2020 has been a year like no other. Beginning with the worst bushfires the country has ever seen and then moving into the covid-19 pandemic, 2020 has caused unprecedented hardship for all Australians.
The renewable energy industry hasn’t been spared from the economic and societal upheaval caused by the pandemic. Across the year, the industry has faced challenges such as supply chain disruption, lower wholesale prices affecting project viability and the complete shutdown of the rooftop solar sector in Victoria.
Yet despite all of these obstacles, the industry has emerged from 2020 relatively unscathed compared to many other sectors. And while it is still far too early to judge what the long-term impact will be, there were some positive developments throughout the year that bode well for the future of the industry.
In the early stages of the pandemic many predicted it would have a disproportionate impact on the renewable energy industry. Expectations were for a significant fall in rooftop solar installations as households tightened their belts. There was also a reduction in large-scale project activity as companies looked to reduce their risk exposure and gauge just how deep the economic impact would be.
However, these predictions proved to be unfounded, with the industry showing remarkable resilience to the effects of the pandemic.
The rooftop solar sector has continued to grow strongly, with 2020 expected to be another record-breaking year for the industry. This feat is all the more impressive considering the complete shutdown of the sector in metropolitan Melbourne for more than two months due to covid-19 restrictions. Large-scale wind and solar have also experienced continued strong construction growth throughout the year, while considerable steps have been made in the continued development of hydrogen and battery storage.
Some policy progress
As unprecedented fires ravaged Australia’s east coast in the first few months of 2020, it seemed as if they would be the catalyst for increased federal government action. The Prime Minister came under significant pressure to take meaningful action to address his government’s previous intransigence on emissions reduction, and particularly its antipathy to renewable energy.
However, as this narrative was swept away by the first cases of covid-19 hitting our shores, leading to restrictions and lockdowns that decimated the economy and plunged Australia into its first recession in almost 30 years, it quickly became apparent that significant stimulus would be required to jumpstart the Australian economy and replace the jobs lost to the crisis.
The Clean Energy Council’s answer was A Clean Recovery, a comprehensive package of reforms to use renewable energy to inject more than $50 billion into the economy and create over 50,000 jobs in regional Australia while building the infrastructure necessary to develop a 21st-century electricity system.
After several months of lobbying, the Federal Budget handed down in October adopted several of the recommendations outlined in A Clean Recovery, including an extension of the Australian Renewable Energy Agency, support for essential transmission investments and a number of skills and training programs to help develop the clean energy workers of the future.
While not going to the extent that the industry had hoped for, and despite the bluster about a “gas-led recovery”, the budget measures are pragmatic and sensible solutions. When considered with the Opposition’s commitment to establishing the Rewiring the Nation Corporation – a $20 billion plan to accelerate investment in Australia’s electricity network – there are some hopeful signs that the ideological heat may finally be coming out of the energy policy debate, and that some degree of bipartisanship may be possible.
Yet even if these hopes turn out to be yet another false dawn for federal energy policy, the states and territories continue to make significant strides. Throughout the year, Queensland and NSW committed to vast new renewable energy zones, Victoria announced another reverse auction for 600MW of new renewable energy capacity and Western Australia embraced clean energy in its 20-year energy plan.
When added to the world-leading renewable energy penetration in South Australia and Tasmania’s ambition to achieve 200% renewables, the states and territories are ensuring that Australia’s clean energy transition continues to gather pace.
Biggest challenges await
Although the Australian renewable energy industry has so far handled the effects of the covid-19 pandemic remarkably well, this is no time for complacency. As we have seen in other parts of the world, the persistent threat of the virus’s resurgence means that economic conditions are unlikely to improve markedly anytime soon, regardless of whether a vaccine is found and administered in the near term. This means that over the next few years the industry will have to change the way it operates to successfully navigate its way through the worst recession in almost a century.
In addition to the difficult economic conditions, many of the challenges that the industry previously faced haven’t gone away. A lack of investor confidence and falling numbers of financially committed projects were significant issues before the pandemic struck. At the same time, grid connection complications, such as those experienced in the West Murray region, will continue to be a key area of concern for large-scale renewable developers.
Despite these challenges, the industry is stronger than it has ever been. It’s no longer a case of if we will make the transition to a clean energy future, but when. And while the industry will inevitably suffer some setbacks along the way, its performance in one of the most difficult years that we’ve ever experienced is testament to just how far we’ve come.
Kane Thornton is chief executive officer of the Clean Energy Council.