What has slowed renewables in Australia?
The AEMO provides a neat quarterly assessment of the NEM renewables rollout, giving us a snapshot of where things are at. In short, the major reason the pipeline of renewables has slowed is that connections have not kept pace. This bottleneck is easing, but the pace of applications for new projects is accelerating much faster. The post What has slowed renewables in Australia? appeared first on…
The sluggish growth of renewable energy in Australia has been hampered by several factors. A key reason is the mismatch between the pace of renewable project applications and the capacity of the National Electricity Market (NEM) to integrate these resources. The Australian Energy Market Operator (AEMO) reported a robust pipeline of renewables, with incremental output reaching 10.5 GW and full output more than doubling to 9.1 GW / 12.9 GWh across 34 projects.
However, the capacity to connect these projects has lagged, causing delays that have stretched implementation times to two years, instead of the usual 10 years for super-critical coal plants.
The surge in battery storage technology has outpaced that of traditional generation, driven by daily energy demand patterns that create a "duck curve," driving electricity prices down during the day. This makes batteries a profitable option for utilities rather than new generation projects. The Capacity Investment Scheme (CIS) has failed to address this issue, instead leading to underbid generation projects that struggle to adapt to market realities.
Despite these challenges, the storage boom is expected to reduce gas's role in price-setting within the NEM, potentially leading to lower wholesale prices.
The connections problem, however, remains a significant hurdle. While completions have dropped sharply, the pipeline is still substantial, indicating that improvements in connections and firming power should eventually boost the transition. Yet, the overall transition is lagging, with state governments currently subsidizing unprofitable coal-fired power to compensate for gaps.
The root cause of these issues appears to be the politicization of the transition, with carbon pricing and gas reservation policies deemed necessary to avoid the current predicament.
The politicization of the transition, coupled with a gas cartel that has driven up electricity prices, has fueled community resistance to the entire project. This resistance further exacerbates the connections lag and provides skeptics with more ammunition to question the transition's success. The solution, according to the source, lies in acknowledging past mistakes, setting more realistic deadlines, and rebuilding political consensus for the renewable energy transition.
Utility-scale solar plus battery storage emerges as the most promising solution, approaching competitiveness as battery costs continue to fall.
Written by urgent.news from MacroBusiness's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
