A new report from industry research and forecasting company Macromonitor predicts that renewable energy construction, spurred by government clean energy targets, the closure of coal-fired power stations, and global decarbonisation efforts, will rise from $12 billion (USD 7.89 billion) in 2023/24 to $20 billion in 2026/27.
The Utilities Construction Outlook – Australia report shows a massive surge in renewable electricity projects is driving the largest boom the nation’s utilities construction sector has experienced in 15 years.
The report notes that over the past three years the total value of utility construction has soared by 41% to an all-time high of $40 billion in 2023/24, surpassing the previous record of $38 billion set in 2012/13. Those figures are expressed in constant 2021/22 prices, so the increase is not inflated by the cost increases of recent years.
Macromonitor economist and the report’s author, Abdul Hannan, said the growth is forecast to continue, peaking at about $50 billion in 2026/27.
Image: Macromonitor
Hannan said electricity construction is leading the boom, accounting for more than half of all utility construction in the next decade. He did however warn that “several challenges” could slow the progress of renewable energy construction.
“High construction costs, delays in new grid connections, and issues in regulatory agreements could hamper the pace of large-scale renewable projects,” he said.
“The delayed retirement of coal plants like Eraring in New South Wales, and the possible extension of Victoria’s Yallourn Power Station beyond 2028, reflect concerns over energy security during the renewable transition.”
The forecasts coincide with the release of the Clean Energy Council’s latest quarterly market report that shows there are now 89 renewable electricity generation projects, representing 13.9 GW of capacity, that have either reached financial commitment or are under construction in Australia.
Macromonitor’s Utilities Construction Outlook report provides forecasts for utilities construction spending in Australia, covering electricity, water, wastewater, gas pipelines and telecommunication.
Aside from the surge in renewable energy development, the report also identifies growth in other utilities sectors. Macromonitor forecasts a 33% rise in gas pipeline construction by 2025/26 while investments in water security are expected to push water and wastewater construction to $11.7 billion in 2024/25, with activity expected to hold steady over the following years.
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