Published on January 16th, 2015 | by Joshua S Hill4
Australian Renewable Investment Plummets, As Does Electricity Consumption
January 16th, 2015 by Joshua S Hill
The beginning of the year has been slow for news of Australia’s environmental and energy policies. With Parliament currently on a break, there has been very little news regarding negotiations over the country’s Renewable Energy Target, and therefore the propaganda and infighting has been quiet.
However, a report from Green Energy Markets, an Australian research firm, analysing electricity consumption in the National Energy Market (NEM) for 2014 has found good news, with a decrease in energy consumption compared to 2013 levels. This decrease fails to highlight the impact the Renewable Energy Target made (before it’s future was jeopardised).
On top of that, a separate analysis of Australia’s large-scale renewable energy investment for 2014 continues the woes, showing that levels have dropped to their lowest since 2002.
Electricity Consumption Down
Green Energy Market’s analysis of the National Electricity Market found energy consumption had dropped by 1.1%, or 2,098 GWh, compared to 2013 levels. All states registered a drop in consumption, except Queensland, which registered only a 0.9% increase.
The renewable energy generation for the year dropped from 13.8% in 2013 to 11.8% in 2014, due primarily to a 25% drop in hydro generation levels, and only partially offset by an increase of 6.4% in wind generation.
Unsurprisingly, then, brown coal and gas-fired generation both increased their own output, seeing increases of 4% and 11.5% respectively.
That energy consumption is down is a good thing, and the trend (shown below) is expected to continue as technology evolves.
Metered scheduled demand from 2006 to 2014
In fact, analysis shows that solar installations supported by the Renewable Energy Target and energy efficiency activities contributed significantly to the decrease in energy consumption throughout 2014, accounting for 1,877 GWh, or 89% of the observed reduction.
Reduction in electricity demand (2014 cf: 2013)
However, the drop in hydro — which was caused by a return to relatively normal levels after 2013 — saw brown coal and gas both increase in generation through 2014.
Differences in metered generation by fuel (2014 cf: 2013)
Wind also saw a small increase.
Investment Levels Tumble
However, despite small breakthroughs, attempts to scale-back or downright eliminate Australia’s Renewable Energy Target have caused investment levels in large-scale renewable energy projects to plummet.
Towards the end of 2014, the Australian Climate Council released figures showing that investment into renewable energy projects had already dropped by 70% by November.
“We’ve had a loss of 70 per cent of new investment in renewable energy in this country, and when you compare that with the US and China, which are powering ahead – China particularly at record levels – it’s a pretty sorry state of affairs,” said the Climate Council’s Professor Tim Flannery.
Fast forward to January 12, and Bloomberg New Energy Finance’s Australian offices released an analysis of large-scale investment in the country, and found that investment had plunged 88% in 2014 compared to 2013, “due to uncertainty over the Renewable Energy Target.”
Total new large-scale renewable energy investment in Australia (AUDm)
As a whole, total clean energy investment levels fell by 35%, the lowest level since 2009 — and this fall was due primarily to the massive drop in large-scale investment. Clean energy investment only reached AUD$4.6 billion in 2014, with only 240 million for large-scale asset financing.
As a result, according to Bloomberg, Australia slid from being the eleventh largest investor in large-scale clean energy projects in 2013, to 39th! This puts us behind countries like Honduras (ranked 33), Costa Rica (ranked 27), and Myanmar (24!). Compared to countries Australia is usually placed alongside, economies such as Canada, Brazil, and South Africa have each invested over 20 times as much in large-scale clean energy as Australia did in 2014.
Australia’s large-scale investment figures also compares poorly against a number of its trading partners, including China (who invested $64.4 billion), the US ($12.9 billion), the United Kingdom ($10.7 billion), Japan ($5.3 billion), India ($4.5 billion), and Indonesia ($1.8 billion) — In other words, Indonesia invested 7.5 times as much in large-scale renewable energy than Australia did.
What does Bloomberg’s analysts have to say about ‘why’ Australia’s large-scale investment has plummeted?
The severe downturn in large-scale investment has been caused by the federal government’s review of the Renewable Energy Target, which has made the sector practically uninvestable.
“Practically uninvestable” is not a turn of phrase that anyone wants to hear for Australia, least of all those of us who live here.
The only bright spot out of the entire Bloomberg report is the news that Australia’s investment levels were mitigated somewhat by approximately AUD$2.3 billion worth of spending by households and businesses on small-scale PV.
Growth in rooftop solar has been a national trend for some time now, most particularly in South Australia. With the country’s highest penetration of rooftop solar in the country, with more than 23 per cent of all customers having solar — and nearly 50% of all wind capacity in the country — South Australia has proven the exception that proves the rule. States and local governments must act on their own, if Australia’s is to maintain any shred of a renewable energy industry worthy of salvaging when Prime Minister Tony Abbott is voted out in the next election.