The Australian government’s Clean Energy Regulator (CER) has released its quarterly carbon market report for the December quarter of 2022. The report shows that the carbon market in Australia is continuing to grow, with the number of registered participants and the volume of emissions reductions increasing.
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Rooftop solar PV: Third highest installed capacity on record
The third-highest installed capacity on record was reached in 2022 credit goes to a strong Q4 recovery for small-scale solar PV, which resulted in 2.8 GW being installed.
With a record average system size of 9.6 kW, about 900 MW of small-scale solar capacity was installed in the fourth quarter of 2022. (see the below graph). The seasonal increase in more substantial commercial and industrial installs was able to account for this.
The Clean Energy Regulator (CER) Chair, David Parker said 2023 might be a record year if the trends seen in the second half of 2022 continue this year.
“Consumers are taking advantage of shorter payback periods for rooftop solar to avoid rising energy prices. If this trend continues, households and businesses could install record additional capacity in 2023 of 3.2 G.”
Battery storage is in greater demand
In 2022, almost 7% of rooftop solar PV systems were installed with concurrent battery storage, up from 3% in 2021.
Investment surges for large-scale renewables
- Renewable energy met a record average of 35% of demand in the National Electricity Market (NEM) in 2022, with more than 40% in Q4.
- Total new investment in wind and solar hit a record 7.1 gigawatts (GW)
– 4.3 GW of large-scale wind and solar energy projects reached a final investment decision (FID) in 2022 – a 50% increase over 2021.
– 2.8 GW of small-scale solar PV capacity was installed in 2022, the third highest annual capacity installed on record. The H2 trend suggests a more significant year in 2023.
- A 5.3 GW of new renewable energy capacity was added to the grid in 2022.
– 2.5 GW of new capacity was approved for large-scale generation certificate (LGC) creation in 2022. A similar level of capacity is expected to be approved in 2023.
“This large step up in wind and solar investment – big and small – in the second half of 2022 is a positive step in transitioning our electricity system to the government’s goal of 82% renewable energy by 2030,” according to Mr Parker.
Investment in Australian wind and solar farms grew by nearly 50% from 2021 to 2022. Investors committed to building 4.3 gigawatts (GW) of large-scale renewable energy capacity in 2022. That’s enough to power all homes in Queensland.
Quarterly carbon market report 2022 data highlights
The Quarterly Carbon Market Report is the leading source of data on Australia’s carbon markets. It provides a regular view of supply and demand across the carbon markets it administers – large-scale generation certificates (LGCs), small-scale technology certificates (STCs) and Australian carbon credit units (ACCUs). It explores key factors that influence market performance and provides information on trends and opportunities that may inform market decisions.
Confidence renewed in the ACCU market
The report also highlights the success of the Safeguard Mechanism, which is another government program aimed at reducing greenhouse gas emissions.
The success of the Safeguard Mechanism is encouraging news for Australia’s efforts to address climate change. These programs are helping to drive emissions reductions, and they are also providing incentives for businesses and organisations to invest in clean energy and other sustainable practices. The report shows that the carbon market in Australia is continuing to grow, and more businesses and organisations recognise the importance of taking action to reduce their carbon footprint.
- The proposed Safeguard Mechanism reforms and outcomes of the Independent Review of ACCUs have driven renewed interest in Australia’s carbon markets.
- In the 2 weeks following the release of the Review and draft reforms, ACCU spot prices hit a 9-month high with reports of more than 3.2 million ACCUs in spot and forward trades.
- 17.7 million ACCUs were issued in 2022, whilst total holdings of ACCUs doubled to 22.7 million. New issuances are expected to exceed 18 million in 2023.
- 2022 saw a record 23 million ACCUs transacted in the secondary market, more than triple that of 2021.
Going solar
The quarterly carbon market report from the Clean Energy Regulator is a positive sign for Australia’s efforts to address climate change. The increase in registered participants and the success of the Safeguard Mechanism, show that more businesses and organisations are taking action to reduce their greenhouse gas emissions. These programs are providing important incentives for investment in clean energy and other sustainable practices, and they are helping to drive the growth of the carbon market in Australia.
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Sources&Images: Clean Energy Regulator webpages
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