Renewable energy investment looks to be going from boom to bust as prices collapse

Source: ABC reporter Stephen Letts

26 Apr 2019

Having burst out of an investment black hole at warp speed, the renewable energy sector’s massive building boom looks likely to hit an uncompromising wall.

The reckoning is likely to be sooner rather later, as a nasty confluence of factors keeps mounting up.

Long-term contract prices are tumbling, and the market operator has effectively slashed the value of projects operating on the periphery of the network.

On top of that, rooftop solar’s rapid uptake is competing directly with utility-scale solar, and coal is still a cheap form of power.

All of this has developers and investors scrambling to see if their numbers still stack up. Many don’t.

Almost $25 billion was invested in new large-scale renewable generation last year.

That is an extraordinary turnaround from the building boycott between 2013 and 2015 that coincided with the prime ministership of Tony Abbott, and the less-than-encouraging policy stance outlined in the Warburton review he commissioned.

Since then, there has been a boom. Around 4,700MW (megawatts) of solar and 5,400MW of wind generation has been committed since 2016.

Another 1,240MW of solar and 440MW of wind projects have secured long-term price agreements, but have not so far received final investment approval.

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