Many industries will regard 2020 as a year to forget, but in the face of extreme adversity, the renewable energy sector managed to thrive.
The year opened with horrendous bushfires that ravaged the country and then felt the bite of the COVID-19 global pandemic, which forced widespread closures, lockdowns and restrictions to prevent the spread.
MinterEllison and Acuris’ 2021 Australian Renewables Report1 explored the impact of COVID on green industries, and found plenty of encouraging signs that they had not only survived, but are set to thrive. Some of the findings included:
- Nearly two-thirds of all businesses plan to invest more in green energy in the next two years. Another 20 per cent plan to keep their investment the same, which means very few businesses plan to reduce their spending on green energy.
- Domestic businesses are set to lead the way, with over 80 per cent saying they will increase their investment in the sector.
- Solar, wind and batteries are being viewed as low-risk investments that are essential in the years ahead.
- The struggling mining industry can recover by using renewable energy to power its operations.
“One of the positive factors shaping the renewables financing environment is the growth of environmental, social and governance lending and investing,” the report reads.
There were plenty of positives, but challenges were also identified, including policy uncertainty, unclear incentives and regulatory complexity.
Hydrogen set to be the next significant industry
The potential for hydrogen has been bubbling along since 2018, when Australia’s chief scientist Alan Finkel said solar-powered hydrogen could be a multi-billion dollar export market. That is set to become a reality with several large-scale projects underway, including a partnership between Origin Energy and South Korea to export hydrogen, which will be used to create green steel.
The MinterEllison report revealed that almost half of all small businesses believe hydrogen is an attractive investment opportunity.
The impact of COVID-19 on Australia and renewables
Lockdowns and restrictions had a significant impact on businesses, particularly in Melbourne and wider Victoria, where stage four rules were endured over an extended period.
While most construction and trades were notified to shut down, solar installations were allowed to continue, which helped the industry tread water during the peak of the pandemic.
As businesses began to open their doors again, sustainable energy was earmarked as a way to kickstart the economy again. The NSW Government-backed solar battery storage to aid in the COVID-19 recovery and enacted legislation that meant homes could install solar panels without council approval.
The Small Business Sustainability in a COVID-19 World report was also released and highlighted the need for SMEs to focus on green solutions as part of their recovery. Small businesses agreed, with 44 per cent saying they view sustainability as a key to future success – up from 31 per cent before the pandemic.
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- Positive outlook for investing in Australian renewables, MinterEllison