If there’s one thing that we can be sure about in 2022, it’s that Australia’s clean energy transition will continue gathering momentum, writes Clean Energy Council chief executive Kane Thornton.

The past two years have been unlike any that we’ve ever experienced. Lockdowns, border closures and economic turmoil – not to mention the devastating health impacts of the pandemic – have combined to affect our lives in ways that none of us could have ever imagined. Yet despite all the challenges and disruption, we’ve also witnessed some profound positive changes, with the rapid maturation of renewable energy and energy storage perhaps the most exciting. 

Now that the worst of the pandemic is hopefully behind us and a degree of normality is beginning to return, we can look to the year ahead with a level of certainty that we haven’t had for quite some time. While the past two years have shown that predicting the outcome of anything is incredibly difficult, it is possible to identify some of the trends and issues that are likely to shape the clean energy industry in 2022.  

Renewables and climate key issues as election season approaches 

The obvious starting point when looking ahead to 2022 is the federal election, which is due to be held in the first half of the year. As has been the case in every federal election in recent memory, climate change and renewable energy will again be at the forefront of the campaign.  

In a depressingly familiar but entirely predictable sign of things to come, the Coalition has already signalled its intention to rehash the highly successful scare campaign that it ran on Labor’s climate targets during the 2019 federal election. However, it’s unlikely to be as effective in 2022 as a lot has changed in the three years since the last election.  

Most significantly, Labor has adopted a more modest target of a 43 per cent reduction in emissions by 2030 and provided full costings of the policy. It also has the support of business and industry this time around, with the Business Council of Australia and the Australian Industry Group both calling for higher targets than Labor has offered. 

The other significant difference in 2022 is the shift in public attitudes to climate change. As a result of initiatives such as the Clean Energy Council’s Renewable Energy is Here Now campaign and COP26 in Glasgow, there is a growing expectation among voters that the Australian government should take greater action to combat the effects of climate change. 

Climate change and energy policy look set to be at the forefront of yet another federal election.

As both major parties have committed to net zero emissions by 2050, the debate during the campaign is likely to focus more on the best way to achieve this goal and the speed at which we get there. While it would be naïve to think that this will completely end the undermining and misinformation that has typified the climate change debate, it does represent a subtle shift in the messaging that could take some of the heat out of the issue. Who knows, we may even look back on 2022 as the beginning of the end of the climate wars that have afflicted Australian politics for far too long. 

Grid connection to improve, but transmission still needs work 

As has been the case for several years now, grid connection and transmission investment will again be major concerns for the industry in 2022. However, the significant work done by the Connections Reform Initiative (CRI) in 2021 should begin to have a noticeable impact on projects looking to connect to the grid in 2022. 

Formed in early 2020 by the Clean Energy Council and the Australian Energy Market Operator (AEMO), the CRI brought together renewable energy companies, network service providers and other industry stakeholders to address concerns with the delays and increasing complexity of connecting to the grid. After working throughout the past two years, the CRI delivered the Connections Reform Roadmap in late 2021, which provides a comprehensive set of recommendations to improve the connection process in relation to access standards, information asymmetry and modelling, batching of connections processes, and providing post-financial close predictability for developers.  

The implementation of these recommendations will begin in earnest in 2022 and are likely to involve several recommended rule changes, material changes to process and information availability, and changes to the minimum access standards. While it will take some time to implement these changes and have them filter through to the projects connecting to the grid, by the end of 2022 we should start to see some easing of the challenges that have caused so much difficulty for new projects connecting to the grid over the past few years. 

There were some positive developments on the transmission front in 2021, including the approval of important projects such as Project EnergyConnect, state governments making strong commitments to improving transmission infrastructure in renewable energy zones and AEMO’s 2022 Draft Integrated System Plan (ISP) reinforcing the importance of transmission to Australia’s ongoing energy transition. However, with the ISP finding that as much as 10,000 km of new transmission will be required to support Australia’s renewable energy transition, there is an urgent need to begin planning and building the infrastructure immediately to ensure that the system remains resilient and can enable the hundreds of new projects needed to decarbonise the electricity system. 

Big batteries and rooftop solar to thrive despite early challenges 

The utility-scale storage sector continued to develop strongly in 2021, which included the commissioning of Australia’s largest battery – the 300 MW/450 MWh Victorian Big Battery. However, with a further 23 large-scale battery projects under construction or financially committed around Australia at the end of 2021, you can expect that 2022 will be an even bigger year for the sector. The coming of the battery age is a significant milestone in Australia’s renewable energy transition as it helps to solve the final challenge of maintaining reliability in an electricity system with a high penetration of renewable energy. 

After several phenomenal years of growth, the outlook for the rooftop solar sector is a little more uncertain in 2022. Supply chain concerns and shortages of key materials combined to increase the cost of solar PV panels for the first time in years towards the end of 2021, which could have an impact on new installations in early 2022. However, these challenges should settle down as the year progresses and the considerable cost and environmental benefits of rooftop solar offset any minor price increases that stick around.    

Living with uncertainty is something that we’ve all become used to over the past two years. And with the effects of the COVID-19 pandemic lingering as we head into a federal election, uncertainty is something that we’ll have to continue to live with in 2022. 

But as we embark on another new year, one thing is certain: the Australian renewable energy industry has never been more ready to take advantage of the opportunities and overcome the challenges that will present themselves in 2022.