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The Renewable Satisfaction

This week the Clean Energy Council (CEC) released their bi-annual survey of renewables industry leaders. It appears New South Wales (NSW) is the preferred place to develop clean energy projects.

The confidence index shows that NSW has the strongest levels of confidence with a rating of 7.6 out of 10. The next preferred locations across the National Electricity Market (NEM) were Queensland (QLD) and Victoria (VIC).

The survey of leaders was taken prior to the pre-budget announcements in November. The results may be skewed by the announcement of the NSW renewable roadmap. The Tasmanian and Victorian governments have made further commitment after the survey.

Some of the confidence is most likely due to a perceived view that the NSW government is making long term investment decisions. Transmission infrastructure is a key step in providing renewable developers certainty, in getting the output from their project to market. The NSW government released its NSW Transmission Infrastructure Strategy in 2018 and building on this the NSW Electricity Infrastructure Investment Roadmap.

While other regions such as QLD and VIC are receiving negative attention due to existing transmission constraints and recent transmission constraints due to the rapid uptake of renewables, NSW has been seen as identifying and addressing these key challenges.

The grid connection process and technical requirements remain the number one challenge for developers. The technical complexity needed to be overcome during the connection process to alleviate system strength issues have caused ongoing concerns in QLD and VIC.

Industry also found the clean energy industry could be a catalyst for strengthening rural and regional communities where projects are based, providing ongoing job opportunities and boost to local manufacturing businesses.

Overall, the confidence index has dropped to 6.7/10 compared to 7.3 when the CEC surveyed leaders in July. Apart from the grid connection issues the main reason for the drop in confidence was the federal governments interventions in the energy market.

The concerns around grid connection roadblocks are hardly surprising. At the end of a year where the Australian Energy Market Operator (AEMO) has consistently warned of network capacity being reached on parts of the NEM.

The CEC survey found it wasn’t just the known grid issues that were undermining confidence among investors in large-scale solar and wind energy projects, but “unpredictable changes” to grid connection requirements and protracted processes. “Grid-related issues remain by far the biggest challenge in development, construction and investment in general,” said one survey respondent in comments recorded by the CEC. “Not just that it’s hard, that it’s random.”

The investment in grid capacity to address grid congestion and constraints was highlighted as the second biggest business challenge. The $32 billion NSW Electricity Infrastructure Investment Roadmap, may be perceived as addressing the restrictions through investment in interstate transmission lines and the creation of Renewable Energy Zones.

Fifth on the CEC’s list of concerns was the lack of long-term integrated federal energy and climate policy.