Australia overshoots its renewable energy target

Australia has recently overshot its renewable energy goal for 2020 by almost 1GW. Since collecting enough completed projects to meet the target by the end of August, the latest data from the Clean Energy Regulator noted the achievement.

The CER said in its October 2019 large-scale generation certificate market update that at the closing of September 2019, the official capacity for this year was at 7.3GW. This was up from 6.4GW at the end of August.

Energy prices will drop with new wind and solar generation in regional Victoria.

Renewable energy goals. Image: Pixabay

The report also noted that since 2016, more than 13GW of fresh large-scale projects in renewable energy are either under construction, have been committed to are are likely to be built. Recent additions to the forecast had also been managed by corporate PPAs and smaller players in the field.

Out of the huge 13GW, 7.3GW is labelled as accredited. Additionally, 4.3GW is under construction and financially backed, while 1.6GW is currently subject to certain power purchase agreements.

 

2019 targets set good pace for 2020 renewable energy targets

 

Throughout 2019, the CER said the pace of renewable projects on a larger-scale has been at a moderate pace. Approximately 4GW of new additions to the pipeline are to be accredited, which is up from 3.5GW for 2020.

Announcements – such as the Coles PPA – is proving new investments may come as a result of larger Australian bodies playing a part.

Meanwhile, the Regulator noted that while the large-scale generation certificate (LGC) balance would be limited or tight by the end of 2018, it is expected that 35.3 million LGCs will be active in the market by February 2020. This includes a smaller pool of 7.1 million LGCs.

The CER said that 4.7 million of these will be unavailable to be given up, due to shortfall charge refunds and voluntary surrender. LGCs that are surrendered for these refunds are not controlled by previous rules, meaning that entities who want to surrender LGCs for the February 2020 refund can use LGCs generated and validated in 2020.

By the middle of October 2019, LGC prices were sitting higher than usual, at approximately $44. Forecasted costs for 2020 and 2021 are expected to be at $34.75 and $15.60.

Interestingly, the CER observed that only 19 per cent of pipeline projects since 2016 had been underpinned by a couple of Australia’s larger electricity retailers.

Lately, new demand for large-scale renewables through PPAs has originated from fresh players, corporate bodies, and smaller players looking to grow their market share.