Investment in large-scale renewable energy in Australia remains stagnant almost two years after the Abbott government began a review of the sector, according to an annual survey by Bloomberg New Energy Finance.
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Investors spent just $15 million since February 2014 on big wind, solar or other clean energy projects that were not otherwise supported by government programs such as the Australian Renewable Energy Agency.
The Abbott government's repeal of the carbon tax in July 2014 – which removed long-term price support – and a mishandled review that led ultimately to a cut of about one-fifth in the 2020 Renewable Energy Target (RET) meant "confidence evaporated" in the sector, said Kobad Bhavnagri, head of Bloomberg New Energy Finance in Australia.
"It can't be understated that the actions of the Abbott government have destroyed confidence in the renewable energy market," Mr Bhavnagri said. "Lenders in the market are almost all of the view that the political risks in the RET … have made it too risky to invest in."
The picture is not all gloomy, however, with the capacity of new rooftop solar photovoltaic systems rising in 2015.
According to preliminary estimates, new small-scale solar PV totalled 827 megawatts, up from 792MW a year earlier. With lower equipment prices, investment figures fell slightly.
All up, new investment in Australia's renewable energy rose 16 per cent to $4.27 billion in 2015, slightly higher than in 2014 but well shy of the $7 billion-plus invested each year between 2010-2013, Bloomberg said. (See chart below of $US spending.)
Other bright spots included the Australian Capital Territory's reverse auction program and grants from federal government-owned ARENA and the Clean Energy Finance Corp – two agencies still slated for abolition by the Turnbull government.
When investments related to those programs are added to the total investment, financing of large-scale renewable energy rose slightly to $1.18 billion "from the depths of the 2014 investment freeze", Bloomberg said.
Still, Australia will need to triple that amount to the annual sum of $3.6 billion needed to meet even the lowered RET goal of 33,000 gigawatt-hours of clean energy a year by 2020.
Reaching that 2020 goal "looks to very challenging" after two years in the doldrums, Mr Bhavnagri said.
A spokesman for Environment Minister Greg Hunt said investment for 400 megawatts of new capacity had been announced since the new RET target was settled.
"Significant additional investment is expected to be announced or approved over the coming 12 months," the spokesman said.
"The revised target was supported by the renewable energy sector as it is both achievable and sustainable," he said, adding the goal amounts to a doubling of large-scale renewable energy over the next five years.
The Greens, though, said the policy had been undermined by the big parties and major companies.
"The Liberal and Labor deal to cut the RET has enabled the big three energy retailers [AGL, Origin and EnergyAustralia] to prolong uncertainty for this vital industry," said Richard Di Natale, the Greens leader. "So in the first half of 2016, it's important we see some real commitment that they're serious about signing up for renewable energy projects.
"In the absence of a strong RET, the [CEFC and ARENA] are even more important, but it's still Liberal policy to abolish them both," Senator Di Natale said, adding the Greens' policy calls for 90 per cent of Australia's electricity to come from renewables by 2030.
Labor wants the renewable energy share to rise to 50 per cent by 2030.
"Australia has some of the best renewable energy resources in the world, and while the industry recognises that meeting the [RET] will be a challenge, we are up to the task," said Mark Bretherton, spokesman for the Clean Energy Council.
"Negotiating contracts to buy the renewable energy generated by major projects simply takes time, and we are expecting more projects to proceed in the first two quarters of 2016," he said, adding that Prime Minister Malcolm Turnbull "seems committed to restoring confidence" in the sector.
The outlook is more promising on the international front, with total investment in renewable energy rising 4 per cent in 2015 to a record $US329.3 billion ($474 billion), according to BNEF. (See chart below in US dollars.)
The rise came despite falling costs for new solar panels and a plunge in prices of fossil fuels, including a drop of 67 per cent dive in Brent crude prices over the past 18 months.
For large-scale clean energy investment, Australia ranked 12th largest in the world in 2015 behind other resource-rich nations such as Chile (11th) and South Africa (8th), Bloomberg said.
For small-scale solar, Australia was the fifth largest, with $2.17 billion, nudging ahead of Germany but trailing nations such as Britain and Japan.
Renewable energy should continue to grow even with cheap fossil fuels, particularly after the global climate agreement reached late last year, Mr Bhavnagri said.
"Paris certainly creates momentum," he said. "Paris sets the objectives and it is up to countries to set their own policies to get there."