In good times it always feels as though nothing can go wrong. But then – from out of nowhere – along comes trouble. As the Australian clean energy sector tears ahead on another year of record growth it is worth feeling around for tremors that could telegraph shock points down the track.

Sure enough 2018 has gone down as a record year, Rystad Energy renewables analyst for Australia David Dixon told clients in Sydney in late February, with 28GW of solar, wind and storage projects in various stages of development and construction. “It was a massive year,” Dixon said.

Of the 28GW of projects about 15GW was added to NSW alone, and NSW also led all other states in installed capacity in 2018, with more than 500MW of wind and 300MW of solar commissioned.

Last year was also not only a record for solar overall but also the first time utility PV beat utility wind, Rystad’s RenewableCube database showed.

Perfect storm

Against all of this positive news about a boom in investment and construction is the “perfect storm” of hardship created by the introduction of more stringent connection standards, federal dithering on energy policy and difficulty in projecting project timelines, where Dixon says EPCs with fixed-price contracts or low margins have shown a tendency to overrun delivery deadlines.

The total capacity of storage projects in Rystad’s database at February 2019 illustrates the relative ease of progressing lithium technology over much larger pumped hydro projects.

The wave of storage projects is also growing, with a 150% year-on-year increase in 2018, and for the second year running more than 50MW of completed utility storage has come online.

“Storage is growing and it’s growing fast,” he said.

Some cynics would argue the storage story has been hyped, but whether that’s true in the long term this is still going to be a busy year. Pumped hydro and lithium solutions are neck and neck, with about 5GW operating or in various stages of development. “There is no winner yet, in terms of technology, but [lithium] is moving through development stages a lot faster than pumped hydro,” Dixon said.

The storage war

The storage war has started, as the various technologies – pumped hydro, lithium, hydrogen – battle to top the league table of dispatchability to complement renewables.

“There is a history lesson from solar which is essentially repeating itself in the battery world,” Dixon said, pointing to modularity of the technology and falling manufacturing costs associated with large-scale manufacturing in China. “Batteries are a technology to watch.”

If all goes well this year will be another record-breaker, with about 2,400MW of wind, 2,200MW of solar and 100MW of storage. Importantly, in 2019 installed utility solar might for the first time account for more capacity than installed residential solar.

More than 1GW of projects completed in 2019 will likely be hangovers from 2018, Dixon said, and he expects projects will be carried over from this year to 2020.

Rystad’s build forecast for Australian renewables projects to 2020 shows a slowdown may be looming.

Dixon sees about 3GW of new generation and some storage coming online in 2020, with generation split fairly evenly between wind and solar. And there is potential for much more, he says.

“The realistic amount of DA-approved projects that could be financially closed sometime this year is in the order of another 2.5GW, the majority being solar projects. What gets sanctioned in the first half of 2019 is very critical to what 2020 will look like.”

It’s still shaky ground, however. The connection process has become more complex and shockwaves of RCR Tomlinson’s 2018 collapse linger along the industry’s fault lines.

Fingers crossed voters hand the next elected leader of Australia a clear mandate to take a direct path to replacing coal with clean energy.