Lack of energy policy sapping investment confidence, as predicted

28 Mar 19

A report released this week by BIS Oxford Economics is showing investment in renewable energy will start to drop due to a policy vacuum created by the Coalition.

“Based on our analysis of projects that are currently ongoing, have been funded or are likely to be funded, we estimate that that construction work done on renewable energy projects will fall back by close to 50 per cent in the 2020 financial year and drop a further 40 per cent in 2021,” the report’s author BIS Oxford Economics chief economist Sarah Hunter said.

“The pipeline of confirmed projects going into the 2020s indicates that there will be a drop in activity in the near term.”

Although this outcome has been discussed by many industry experts, this is the first time a study on upcoming projects has shown a potential risk in investment in the sector since the government dropped the National Energy Guarantee and did not replace it.

But not everyone agrees. Global power analyst Rystad Energy’s Australian head, Gero Farruggio, disagreed with the BIS forecasts.

“The pipeline isn’t slowing, it’s quite the opposite,” Mr Farruggio said.

He forecast expectations of just below $10 billion a year in renewable investments.

“We’re looking at 4.5 gigawatts of renewables projects in 2019 and still see about 3 gigawatts plus of projects in 2020. We’re already looking at around 1 to 2 gigawatts minimum for the years after. It’s not falling off a cliff.”