Australia is set to add a record amount of renewable power in 2020, driven by growing corporate demand for clean electricity and to fill generation gaps created by the retirement of aging coal-fired plants.
New markets are expected to unlock growth as pilot hydrogen projects start and oil, gas and mining projects invest in off-grid renewables generation, according to Rystad Energy.
The positive outlook would be a rebound for Australia’s clean energy developers after a sharp drop in investment in 2019.
“We expect the industry to bounce back in the second half of 2020,” Rystad said in a media release, citing projects with corporate power purchase agreements and the winners of government auction schemes that are scheduled to start construction this year.
Nearly 2 gigawatts of large-scale solar projects and 1.6 gigawatts of wind power are due to complete commissioning in the year ahead, up nearly 40% on 2019 levels.
Wind and solar developers are also lining up to replace the Liddell coal plant in New South Wales, which is due to close by April 2023.
Still, developers may face headwinds over the longer term. The industry has already met the government’s 2020 target for renewable generation and there is no new target to replace it.
Meanwhile, the profitability of projects located a long way from major demand centers has been hit by marginal loss factors — the amount of power lost along transmission lines.
“While the outlook for the commissioning of new projects still looks solid in 2020, there is a risk that activity tails off in the years ahead as the impact of falling investment starts to feed through,” said BloombergNEF analyst Leonard Quong.