The latest results from the Clean Energy Outlook confidence index reveal a further drop in confidence in new clean energy investment over the past six months. The survey, which gains insights directly from industry executives, found grid connection concerns, lack of Federal Government policy and transmission continue to be the biggest challenges for the industry.
Clean Energy Council (CEC) Chief Executive Kane Thornton said the latest results were disappointing, but came as no surprise.
“As we have consistently said, without strategic and holistic reform of the Australian energy market, we are going to continue to see confidence in new clean energy investment continue to fall,” Mr Thornton said.
“This loss of confidence has already translated into a slow-down in investment – in 2019, we have seen an alarming 60 per cent reduction in investment in new clean energy projects from 2018 levels.
“Our existing fleet of ageing coal generators are becoming increasingly unreliable and will all be shut down by 2050. New large-scale generation is urgently needed to keep power prices down and ensure the ongoing stability of our energy system.
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“Australia has abundant natural resources and huge potential for renewable energy generation, but the industry has been plagued by policy and political uncertainty at the federal level for several years and we are now starting to see the impact of this.”
The survey found clean energy executives rated their confidence to invest in new projects at an average level of 6.1 out of 10. This is the lowest level since the survey was first taken in July 2018, and marks a steady decline from a high of 7.1 a year earlier.
According to the CEC, the recent decision by the Australian Energy Market Commission to leave marginal loss factors (MLFs) unchanged is expected to further deteriorate investment confidence, with industry leaders rating concerns regarding MLFs as the fourth biggest challenge in this survey.
“It is pleasing to see that despite the immense challenges facing the industry at present, around 70 per cent of respondents said they expected the number of people they employed to increase in the next 12 months,” Mr Thornton said.
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“This reflects the incredible gains the industry is making, despite the significant issues around transmission, grid connection and energy policy.
“While some of the survey results are certainly disheartening, I hope that it will serve as a wake-up call to the Federal Government to begin taking the urgent action needed to boost confidence and deliver an affordable, reliable and clean energy system for all Australians.”
The Clean Energy Outlook confidence index is a survey of industry executives taken every six months.