There will be enough renewable energy projects built over the next three years to meet Australia’s Renewable Energy Target in 2020, according to the Clean Energy Regulator (CER).
The CER has previously said that to meet the Renewable Energy Target approximately 6000MW of capacity would need to be announced and built between 2016 and 2019.
This milestone has been surpassed ahead of schedule following a record level of investment in renewable energy in 2017.
Already, 4924MW of the 6532MW of capacity that has been firmly announced is under construction or already operating, with the balance expected to be fully financed and under construction in early 2018.
More than 1600MW of projects have a power purchase agreement in place which are expected to reach financial close.
According to the CER, the construction of this level of firmly announced renewable projects will lead to an investment of more than $12 billion which will support growth in the Australian economy.
Queensland has the largest share of this new build with more than 2000MW of capacity, followed by Victoria with around 1600MW and New South Wales with 1400MW.
One of the major shifts in the market, is the huge increase in share of large-scale solar.
In the first 6000MW committed under the scheme, solar contributed only four per cent of the total. In the firmly announced projects since 2016, solar now makes up 46 per cent.
This will ensure significant additional electricity supply is available in the market well ahead of 2020.
As outlined in the Australian Energy Market Commission’s 2017 Residential Electricity Price Trends Report released in December 2017, this extra supply is expected to apply downward pressure on wholesale electricity prices over the next three years.
2018 should see around 2600MW of new renewables projects commence operating which will further strengthen reliability and reduce emissions in addition to reducing electricity prices.
This additional supply is expected to lead to a reduction in large-scale generation certificate spot prices.
These certificates are purchased by liable entities, mostly electricity retailers, to meet their renewable energy target obligations.