The Clean Energy Regulator has provided its monthly update on renewables progress in Australia. An anaemic 3MW of new accredited projects in September appears to be a temporary lull likely affected by COVID constraints on construction and similar activities. In the two prospective categories of “committed and “probable”. Committed projects are defined as those that “have received all development approvals and reached a final investment decision”. Probable projects “a high degree of confidence that they will proceed following a public announcement of a power purchase agreement with a strong counter party or other evidence of funding.” The CER recorded five new utility scale projects and one project moving from probable to committed for a total of 948MW new capacity.
New utility-scale renewable projects
Two of the projects (Gunnedah, Suntop) are largely underwritten by a corporate PPA with Amazon. Ryan Corner has a contract with a retailer (Snowy Hydro, which owns the Red and Lumo brands) and Berrybank was successful in the ACT government’s latest contract-for-difference auction to top up its renewables offsets. The counterparties of New England and Glenrowan West appear to be undisclosed publicly, but that is no reason to doubt their status.
Curiously, a few other projects that appear to meet the criteria have not made it onto the list. Neoen’s Goyder wind farm (100MW) was the other winner of the ACT auction. This is intended to be part of a much larger complex with additional wind and solar, so Neoen may be trying to line up other offtakers for the rest of the project. Given Neoen’s track record with government schemes, it’s unlikely they would risk their reputation by failing to go ahead with the initial capacity sold to the ACT.
Snowy Hydro have also been busy locking in renewables. Nexif’s Lincoln gap wind farm stage 2 (68MW) is apparently under construction (which sounds farily committed!) on the back of a Snowy deal. The neaby Port Augusta Renewable Energy Project ((317MW of wind and solar) is also already being built, by Spanish giant Iberdrola, who recently added Infigen to their global power company portfolio.
Accordingly there is around another 500MW progressing, for a total of around 1.4GW. A few years back, that would be an impressive annual total rather than a single month’s snapshot. So the renewables market clearly remains robust.
Longer-term, the questions will be whether the drivers of these recent projects continue.
Now the RET has plateaued – will retailers like Snowy still be keen to snap up offtake agreements
Amazon is that rare beast in the corporate PPA world – a very large user but also less sensitive to energy costs. Will developers be able to translate their PPA successes with amazon and its tech peers to smelters and other major industrials?
If the market can’t deliver, are government targets enough to keep the development pipeline going? Now the ACT has topped up, the focus will be on the next Victorian procurement round and what CleanCo does next in Queensland.
Meanwhile spot prices for renewables are collapsing. AEMO’s quarterly energy dynamics points out that average revenue for solar in South Australia was negative in September. Only time will tell whether this rate of renewables development is the new normal or a temporary blip.