Renewables Investors Say Australia’s Grid Delays Hamper Outlays
(Bloomberg) -- Australia’s slow rollout of transmission infrastructure is stalling renewable energy projects and putting the country’s net zero ambitions at risk, according to a survey of investors managing a collective A$38 billion ($25 billion) in renewable assets across the nation.
Transmission delays and slow planning processes are the biggest barriers to deploying capital, closely followed by costly and slow grid connections, according to the survey of members of the Clean Energy Investor Group, which represents companies including Neoen SA, RWE AG and Banpu Pcl.
Australia’s rapid energy transition to replace aging coal-fired plants is seen as a global test case, but its sluggish build out of transmission infrastructure has left new solar and wind projects stranded, and helped make its power market one of the most volatile in the world. Further delays threaten the government’s target to more than double renewable energy generation to 82% of the total by 2030.
“Australia remains highly reliant on foreign investment for renewables, with over 70% coming from overseas,” said Richie Merzian, chief executive officer of the Clean Energy Investor Group. “If the nation continues to be just somewhat attractive for investors we can expect that global capital to flow elsewhere, to other jurisdictions that are rolling out renewables and transmission with speed and scale.”
Investment in Australia’s energy grid fell 48% last year following a record 2023 and is expected to remain uneven, with the nation needing to more than double annual energy transition investment every year through 2030 to meet its climate goals, according to BloombergNEF. That comes despite government pledges to invest billions in wires and poles.
“This idea that we’re just going to build all these renewable energy zones and connect them to the cities is a real challenge,” Hugh Durrant-Whyte, New South Wales chief scientist and engineer, said during a panel discussion at the conference. “It’s a very difficult story altogether. Building a grid is not a trivial thing.”
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