Industry research and economic forecasting company Macromonitor predicts that investment in renewable energy infrastructure construction will rise 49% this year to $5.2 billion (USD 3.48 billion) before surging to a record $11.8 billion in 2026. And even after peaking, annual investment is forecast to remain at about $9 billion a year until at least 2032.
Sydney-based Macromonitor said its Renewable Energy Construction Outlook report – which analyses the Australian renewable energy construction sector, including solar, wind and battery energy storage – reveals a “remarkable surge” in renewable construction in Australia.
The report shows that the sector experienced a 37% increase in construction activity in 2021/22, and Macromonitor anticipates even stronger growth rates of 49% in 2022/23 and 31% in 2023/24.
By 2025/26, the company is forecasting that annual investment in the sector will reach an all-time peak of $11.8 billion in construction work done, in constant 2020/21 prices, more than double the previous peak of $5.5 billion recorded in 2018/19.
“Our estimates show that the renewable energy sector in Australia entered its third phase of growth in 2022, and this upward trend is expected to continue for the next few years with an expected peak in 2025/26,” the consultancy said.
Macromonitor said after reaching that peak, construction activities are expected to decline for the next few years but predicts “they will stay at an historically high level.”
“We expect average annual work done to be around $9 billion for the rest of forecast period, supported by the large projects later in the forecast period,” it said.
Macromonitor said the surge is being driven by several factors including the federal government’s commitment to emissions reduction; the deployment of large-scale battery storage systems; the development of new transmission infrastructure to support renewable energy zones; and state-specific renewable energy targets.
The consultancy said the closure of several coal-fired power stations between 2023 and 2035 is also sparking greater investment in renewable electricity generation.
The report shows that investment in wind and solar energy projects take up a large proportion of renewable construction activity in Australia’s overall construction portfolio with the solar sector’s total value of work done predicted to hit its highest point of $3.6 billion in 2024.
Construction of large-scale battery storage in Australia is estimated at $1.2 billion this year and is expected to rise to $1.8 billion each year between 2024 and 2026.
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