After a year of very significant policy shifts and growing support for the industry, Clean Energy Council Chief Executive Kane Thornton looks back over another big, albeit mixed year, and ahead to what should be a critical year for the clean energy pathway in Australia.
At this point last year, much of the clean energy discussion revolved around how the new federal administration would positively affect the sector, and how that would relate to acceleration of the clean energy transition.
Some questions on delivery remain, but 2023 provided some very positive and financially well-backed answers. There is no doubt that appetite and support for clean energy in Australia has grown. That began in 2022 when the Albanese Government promised $25 billion for clean energy spending in its first budget, and was built upon in May 2023 when the Federal Budget made $4 billion in new commitments, including $2 billion to turbocharge the green hydrogen sector and $1.6 billion to help drive the electrification of Australian homes and businesses.
Towards the end of 2023, the Federal Government made its most significant response yet to international legislative movements such as the US’s Inflation Reduction Act, when it announced a huge expansion of the Capacity Investment Scheme, which aims to contract 23 GW of new renewable energy generation between 2024 and 2027 – a significant commitment that is intended to put Australia back on track to achieve the government’s target of 82 per cent renewables by 2030. It was great to see the government doubling down on its support for renewable energy – the sort of support we need to bring on investment and deliver the projects that are going to help lower power prices and ensure we have a reliable energy system for the future.
And that appetite has been reflected at the state level too, as for example when incoming Queensland Premier Steven Miles used his first speech to raise QLD’s emissions reduction targets, making it one of the most ambitious states in the country in that respect. We also had significant state legislation come to the fore, such as the Climate Change (Net Zero Future) Bill in NSW in November, which passed with significant support from all sides, and enshrined net zero emissions targets into law.
Promise and pain points
But while policy positioning and support for the industry has increased, the actual development of large-scale renewables in Australia has been a mixed bag. On the one hand, we saw a record-breaking year for large-scale storage, with investment breaking the billion-dollar mark during a quarter for the first time, in Q2, and totalling at least $2.3 billion for the year. We also saw another strong year for Australia’s world-leading rooftop solar sector, with November the highest-ever month for capacity installed, according to SunWiz data.
On the other hand, however, we saw a significant slowdown in investment in utility scale projects: the first half of 2023 was the slowest since the Clean Energy Council began recording data in 2017, and things didn’t pick up much after that. The Australian Energy Market Operator (AEMO) released its draft Integrated System Plan (ISP) in December 2023, which stated that in order for Australia to meet its target of 82 per cent renewables by 2030, we need to see roughly 6 GW per year of new capacity installed – far above the levels we saw in 2023.
The industry now stands at a crucial point. We can see the renewable future ahead of us, we know how much we need to build and the rate at which we need to build it, and we have policies in place to help us get there, hopefully with more to come.
At the beginning of 2023 we predicted a state-led revival in utility scale clean energy developments, which unfortunately hasn’t come to pass. But we’re now in a position where federal and state governments are making significant moves to accelerate the transition, and so we can more confidently repeat our prediction for 2024, hoping to see considerable moves in large-scale capacity, storage and transmission infrastructure. This is buoyed by a material uptick in large-scale projects coming into the end of 2023.
This year is about ensuring that projects move from ‘planned’ or ‘approved’ to ‘under construction’ or, ideally, ‘built’. That is where a huge amount of the Clean Energy Council’s advocacy work will be focused for this year and beyond.
Supercharging rooftop solar and storage
As well as advocating for and supporting the utility scale sector as much as possible, we will be continuing our dedication to the distributed energy resources space (electrified homes and businesses, including rooftop solar and battery), which did much of the heavy lifting in 2023 as Australia’s large-scale sector slowed.
As mentioned previously, we’ll be spelling out what we think the future of the sector should look like in our Distributed Energy Roadmap. Launching in Q1 2024, the goal of this initiative will be to drive policy changes that increase the uptake of rooftop solar and storage, as well as other distributed energy assets, in the most cost-effective way, ensuring customers get access to the benefits of the transition, including greater energy independence and greater control over their bills.
We’ll also of course be giving installers and designers extra support through our myCEC program, which offers expert tech advice and support; and through our New Energy Tech Consumer Code (NETCC) program, which is raising standards of consumer protection and confidence, and encouraging innovation and choice.
In 2023 the policy landscape for distributed energy changed in numerous ways, including the disbanding of the Energy Security Board and the establishment of the Consumer Energy Resources (CER) Taskforce. The Taskforce is charged with developing a CER Roadmap and establishing nationally consistent technical standards. Those were outcomes from the final Energy and Climate Change Ministerial Council meeting of the year, which are aligned to solar pv and storage policy positions the Clean Energy Council had been advocating strongly for. Nationally consistent technical standards are essential in connecting solar pv and storage to the grid, and will help the sector accelerate in a more unified, efficient manner.
The coming year will be a significant one for distributed energy resources. First and foremost, it will be crucial for the government to implement a national small-scale renewable generation and storage incentive scheme to ensure we achieve AEMO’s 2024 draft ISP solar pv and orchestrated storage targets. An extension of the Small-Scale Renewable Energy Scheme (SRES) to capture storage or a direct rebate for consumers buying home batteries (as South Australia and Victoria had previously provided, and as Queensland adopted when it launched its Battery Booster program in late 2023) is a fundamental policy priority in achieving AEMO’s forecasts for distributed energy.
Second, if we can get integration right, solar PV can be critical in supporting broader government objectives of driving down the cost of living, decarbonising the economy and building energy resilience. When paired with storage, PV systems enable consumer to produce and consume electricity in accordance with their own needs and preferences, shield owners from outages and defer costs for network upgrades and buildouts.
Exciting year ahead
There is plenty to look forward to in clean energy in 2024. In terms of new capacity commitments, 2023 may have been a disappointment, but we also saw very significant policy announcements and unprecedented funding commitments that, if implemented in the right way, will genuinely accelerate and change the face of the industry. There were also outstanding results in rooftop solar and large-scale storage, each critical to our 2030 and 2050 transition targets.
The pace of change is increasing and the weight of support for the industry, too. With a tailwind of support behind us, we can realistically hope for a transformative year ahead. At the Clean Energy Council we’ll be leading the charge alongside our members, and we hope to see you all there with us.
This article featured in the February edition of ecogeneration.
For more renewable and solar news, subscribe to ecogeneration.