Construction in the Australian utilities sector is rebounding, thanks to renewable energy infrastructure driven by the 2020 Renewable Energy Target (RET).
According to a recent Macromonitor utilities report, utilities construction would be in decline without RET-driven investment in clean energy projects like solar. However, once the RET ends there is no follow up policy in place.
The construction rebound in the utilities sector is also due to improved commercial viability of renewable projects, the report found.
Solar power grows, wholesale prices fall
Macromonitor tracks and forecasts trends in the Australian construction industry. Its report states that construction in the utilities sector has bounced back over the past two and a half years.
Major reductions in the cost of clean energy have seen a relatively long run of high renewables investment, Macromonitor claims. Substantial solar power growth has already caused daytime wholesale prices to fall as a result.
However, these falling prices will make new renewable energy infrastructure projects less financially feasible and also put pressure on coal-fired power stations.
Macromonitor predicts renewable sector investment will fall beginning in 2020-21 for up to five years.
Renewable energy infrastructure surges
Meanwhile, an $18 billion-dollar leap in renewable energy infrastructure is helping to balance a fall in residential construction.
In May, the Australian Construction Industry Forum revealed a boost in the electricity and pipelines category over the previous six months.
New infrastructure is needed to connect the nation’s growing number of large-scale wind and solar installations, the Australian Financial Review reports.
This includes a $1.5 billion interconnector between NSW and South Australia.
Meanwhile, the latest Business Outlook report from Deloitte Access Economics also shows renewables like commercial solar boosting investment in Australia’s construction and engineering sectors. This will also reduce the export market for thermal coal.
Australia undergoing renewable energy revolution
Clean Energy Council (CEC) figures show 14.6 GW of new wind and solar projects underway across Australia in 2018.
Queensland led the way with $6.9 billion of renewable energy infrastructure investment last year. Victoria followed with $5.2 billion, then NSW with $4.3 billion.
The CEC also forecast a surge in renewable energy employment. As a result, record investment will deliver more than 13,000 direct jobs in building, maintenance and operations.