A Sydney-headquartered industry research and forecasting company Macromonitor report projects investment in the solar generation construction sector will expand to $5.4 billion (USD 3.5 billion) by 2025/26 (in constant 2021/22 prices), up from $3.1 billion in 2023/24.
The report, Renewable Energy Construction Outlook – Australia, shows construction activity in renewable energy, including batteries, has more than doubled over the past three years from 2020/21 to 2023/24 and is projected to surge by an additional 88% in real terms over the next four years.
According to Macromonitor, solar projects are forecast to expand to $5.4 billion by 2025/26.It says the boom is driven by federal and state government targets for transition to reliable renewables, scheduled aging coal plant closures, such as Western Australia’s decommissioning all coal generation plants by 2030, and international decarbonisation efforts.
Investment is bolstered by programs such as the federal government’s $65 billion Capacity Investment Scheme (CIS), which saw 119 registrations received in the 6 GW CIS Tender 1, attracting the equivalent of 41 GW of potential renewable generation to supply the National Electricity Market (NEM).
Macromonitor expects Australia will add an average of 7.8 GW of new renewable energy capacity annually over the five years from 2024/25 and 2028/29 inclusive, more than doubling the 3.4 GW average of the past five years.
Report author and Macromonitor Economist Abdul Hannan said an eventual downturn is a natural part of the investment cycle, where the rate of increase in capacity will inevitably need to slow as the industry stabilises, and means a decline in construction.
“While many large new wind and solar projects are in the pipeline, the rate of new project commencements is likely to slow post-2028, leading to a moderate downturn in construction activity,” Hannan said.
The report notes that the wind energy sector is also playing a pivotal role in Australia’s renewable energy transition forecasting investment in wind projects set to nearly triple, rising from $3.4 billion in 2023/24 to $9.4 billion in 2027/28 (in constant 2021/22 prices).
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