Investor confidence in renewable energy is rising due to state-led 2030 emissions reduction targets, according to the latest edition of the Clean Energy Outlook – Confidence Index.
The report, released by the Clean Energy Council, details how leadership from state governments is countering uncertainty due to continued challenges with the energy grid and a lack of a strong 2030 climate goal from the Federal Government.
Renewable energy investors have expressed ambivalence about the Federal Government’s long-anticipated commitment to net zero emissions by 2050, and emphasised the need for an improved 2030 emissions reduction target, which a clear majority (79 per cent) said would increase their confidence for future investment.
Overall, investor confidence has increased by a point in the last six months – from 6.3 to 7.3 out of 10 – following strong commitments and policy development from state governments, particularly on the east coast.
Clean Energy Council Chief Executive, Kane Thornton, said that state and territory governments continue to lead the charge in providing much needed policy ambition and clarity that is key to transitioning Australia to a renewable energy future.
“The results of this latest survey illustrate the economic value in policy that lowers the emissions footprint of our electricity generation, supporting regional centres and creating jobs,” Mr Thornton said.
“Investors recognise the opportunities created by limiting global temperature rise to 1.5°C and we’re seeing that capital flow through to New South Wales, Victoria and Queensland.”
New South Wales continues to be rewarded for its clear strategy and legislative certainty to phase out coal generation and become an energy and economic leader in a low-carbon economy, recording the most positive investor sentiment of all states and territories.
Victoria and Queensland are next best, with the Sunshine State rewarded for its strong play for the renewable hydrogen export market, up from a score of 5.6 out of 10 in December 2019 to 6.7 in this edition.
As has been the case since the December 2019 survey, grid connection remains the most significant challenge facing large-scale renewable energy projects, with substantial delays and changes in technical requirements impacting projects and investor confidence.
“The Connections Reform Initiative – which the Clean Energy Council has developed with the Australian Energy Market Operator to bring together Clean Energy Council members, network service providers and key market bodies – will shortly release a roadmap to overhaul the connection process,” Mr Thornton said.
“This must be accompanied by stronger investment and faster progress on building the transmission backbone for a 21st Century energy grid.
“Reform has been slow and a lack of transmission investment is now becoming a major impediment to a smooth and low-cost energy transition.”
