The first three months of 2021 saw firm commitment to new storage projects but very little in the way of new generation, according to a report from the Clean Energy Council.
Three new energy storage projects with a capacity of 600MW reached financial close in the first quarter, the report showed. This was by far the best quarter for energy storage capacity since 2017, almost tripling the previous best set the last quarter of 2019.
While a number of storage projects are currently under construction, no new large-scale
batteries were commissioned in the three months to March 31.
“Big batteries have come of age, with investors recognising the increasing cost competitiveness as well as the role they play in providing energy security and supporting renewable energy across Australia,” said Clean Energy Council CEO Kane Thornton.
“The projects committed in this quarter represent a 300% increase in committed large-scale energy storage capacity compared to the fourth quarter of 2020 and investment to the tune of $400-450 million.”
On the other hand, just 400MW of new generation reached financial commitment in the first quarter, the third-lowest level of new capacity since 2017.
The low amount of new financially committed capacity in this quarter continues a trend seen over the past two years, the CEC report said, with new quarterly capacity only passing 800MW once in 2019 and 2020.
“This is a deeply concerning trend when, in light of the speed of the clean energy transition worldwide, the brakes are being put on Australia’s promise as a renewable energy superpower,” said Thornton.
“Confidence for new investment in the sector is really in limbo at the moment. Projects are experiencing significant and often unanticipated delays through the grid-connection process, and as we saw last week with the announcement of a new gas-peaking plant at Kurri Kurri, government intervention in the energy market adds to the uncertainty for investors.”
In comparison, the amount of new quarterly capacity committed in 2017 and 2018 only fell below 800MW in one quarter.
Only $427 million was invested in financially committed projects in the three months to March 31. This is just the second time since 2017 that quarterly investment has fallen below $1 billion.