It’s official: Large-scale Renewable Energy Target achieved more than a year early

Only a few years ago, there was a general belief that the market would not get close to supplying enough large-scale generation certificates (LGCs) to meet the 33,000 GWh target by 2020 and there would be a shortage until as late as 2022. However, the breakneck speed and scale of project commitments over the last couple of years have seen renewables records smashed across the board and it soon became certain the target will be not only achieved, but also surpassed by a substantial margin.

In its official release on Wednesday, the Clean Energy Regulator (CER) announced it had approved enough capacity to meet the 2020 Large-scale Renewable Energy Target (LRET). The regulator noted that 6400 MW of capacity had to be built between 2017 and 2019 to generate sufficient electricity to achieve the goal. On 30 August 2019, this milestone was met ahead of schedule with the approval of four large wind and solar power stations, with a combined capacity of 406 MW, CER said.

“This achievement represents the hard work of a growing and dynamic renewables industry,” CER Chair David Parker said.

The approval of the 148.5 MW Cattle Hill Wind Farm, owned by Goldwind and partners, saw the milestone surpassed. The Cattle Hill Wind Farm is built on the hills above Waddamana Power Station, Tasmania’s first hydro scheme that was opened in 1916. Also of interest, the first large power station commissioned in 2017 was Goldwind’s 175 megawatt White Rock Wind Farm in NSW, CER said.

Celebration..but what comes next?

There is no doubt that this is a moment to celebrate. The LRET has played a pivotal role in greening Australia’s energy mix and attracted billions in investment over the years, as well as created thousands of jobs. Clean Energy Council (CEC) Chief Executive Kane Thornton said meeting the target had been a massive effort for the clean energy industry for close to two decades, which had transformed renewable energy from one of the most expensive kinds of energy generation to the cheapest.

“The RET is the most successful emissions reduction policy of all time for Australia’s electricity system,” Thorton said. “At a time when people are becoming increasingly concerned about climate change, the RET has been one of the bright spots which is making our electricity system cleaner, cheaper and more reliable.”

The target was introduced in 2001 by prime minister John Howard, as a world first. Since then, it was adjusted numerous times. It was expanded under Kevin Rudd in 2009 and wound back in 2015, under prime minister Tony Abbott, by 20%, from 41,000 GWh to 33,000 GWh.

The current Federal Government had little to do with this achievement. Instead, it made sure there is a policy vacuum beyond 2020 with no replacement for the RET. Energy Minister Angus Taylor, who vowed to kill the RET when he entered parliament in 2013, was quick to interpret the achievement as a promise delivered by the Liberal National Government.

“In 2018, Australia led the world in clean energy investment, with more than double the per-capita investment of countries like France, Germany and the United Kingdom,” Taylor said. “With the renewable energy target set to be exceeded, investment is not slowing down.”

However, analysts do expect a slow down in new projects with investors reluctant to make financial commitments without more policy certainty. With the news that the industry will far exceed the target, the most important question is what happens post-2020 .

“The industry doesn’t need new subsidies, we just need certainty – renewable energy can continue to create opportunities for regional parts of the country for many decades with the right policies in place,” Thorton said. “We’ve always said that if you set us a target, we will beat it. We’ve hit the bullseye with a year to go, and it’s time to start asking ourselves what comes next.”

Hitting the scrapped target

While the capacity target has been achieved, the CER is currently tracking another 6410 MW of renewable energy to be built over the coming years. Despite headwinds, such as grid and connection constraints, as well as adjusted Marginal Loss Factors, this is not the end for renewable energy investment in Australia.

A new analysis released by the Australian National University (ANU) shows Australia will continue to install renewables at record rates and will surpass the scrapped target of 41,000 GWh of renewable energy generation around the end of 2020. Incorporating the data released by CER on Wednesday, ANU finds the renewable energy generated by 2020 is equivalent to 90% of Victoria’s energy consumption and could power South Australia three times over.

“The record installation rates from 2018 will be broken in 2019 despite the Renewable Energy Target being met,” said lead researcher Matthew Stocks. “The renewable energy industry has stepped up to deliver far beyond levels that were expected.”

ANU researchers remind that in the absence of Federal Government energy and climate policy, the installation of renewable energy is now driven largely by economics. “The price of electricity from large-scale solar photovoltaic and windfarms in Australia is now below $50 per megawatt hour – well below the National Electricity Market baseload future prices,” co-researcher Kenneth Baldwin said.

The rapid uptake of renewables has seen Australia emerge as the world leader in terms of rate at which the nation is transitioning its electricity system.”Australia is on track to install 17 Gigawatts of wind and solar photovoltaics between 2018 and 2020. That’s 225 watts of renewable power per person per year,” co-researcher Professor Andrew Blakers said. “This is four to five times faster per capita than the European Union, Japan, the USA or China and 10 times faster than the world average.”