The first half of 2020 was a rollercoaster for the Australian utility-scale renewable energy sector as it faced a global pandemic, a series of massive bushfires during the summer, deflated wholesale prices, and severe delays in finalizing grid connection processes. While this has led to the lowest level of new utility PV and wind construction over any six-month period since 2016, the pipeline of renewable projects in the country continued to grow at record speed, Norwegian consultancy Rystad Energy finds.
According to analytics posted by David Dixon, Senior Analyst at Rystad Energy, 28.4 GWac of utility PV, wind, storage and hydrogen electrolyzers were proposed in the first half of the year, an increase from the 27.2 GWac of capacity additions in 1H19, and significantly more than the 13.7 GWac of capacity added in the country in 1H18.
Utility-scale PV drove the additions, with 9.2 GWac of new capacity, followed by 8.9 GWac of additional onshore wind and 5.2 GWac of hydrogen electrolyzers. Queensland saw the greatest amount of additional capacity, with 17.3 GWac or 61 % of newly proposed capacity, forming the largest pipeline of utility-scale PV, wind and storage of any state in Australia.
Meanwhile, construction activity experienced a major slowdown. For projects greater than 20 MWac, just 503 MWac of new utility-scale solar projects broke ground in 1H20, whilst no new wind projects began construction. The total number of assets starting construction was down to just eight.
While it is likely to remain difficult for advanced projects to reach financial close, the second half of the year is looking positive, according to Rystad, as several projects proceed towards financial close with construction expected to start in the next six to 12 months. One such project is Neoen’s 390 MWac Western Downs Solar Farm in Queensland, which will likely reach financial close after securing a contract to sell most of the power to the state government-owned renewable energy generator, CleanCo. A host of other projects have signed PPAs and are predicted to start construction in 2H20, such as FRV’s 90 MWac Sebastopol Solar Farm, which has a PPA with Snowy Hydro, and Canadian Solar’s 110 MWac Gunnedah Solar Farm, which has a PPA with e-commerce giant Amazon.