Renewables investment ahead of targets


Hey Reader, in today's edition:

  • Healthy project pipeline
  • AER questions on higher fixed charges
  • Iran energy shockwaves

Renewables investment outpacing net zero requirements

Investment in new renewable energy projects is more than double what's required to meet the targets required for Australia to hit its net zero targets, RenewMap has noted in a new analysis showing the gap between ambition and reality.

Some 450GW of renewables are currently under development on the NEM – more than twice as much as the 200GW previously said to be required by 2050 for Australia to meet its targets and replace its coal fleet.

But the growing backlog of projects awaiting environmental approval is slowly extending timeframes, with that pipeline growing from around 65 projects in 2024 to around 140 this year.

AER questions higher fixed charges assumptions

A growing proportion of customers are deciding whether to stay connected to the grid, the Australian Energy Regulator has warned in its submission to the AEMC’s draft pricing review. The regulator has called for further analysis on higher fixed charges and suggested an alternative approach.

While higher fixed charges “may be worth considering in some contexts,” AER board member Lynne Gallagher writes, “the existing rules can support this outcome” and “it is important to address customer impacts and incentives in relation to consumer energy resources and ensure that customers with these resources remain connected to the grid”.

Iran shockwaves disrupt global energy futures

As expected, the price of oil has soared in response to the US-Israel led strikes on Iran, with the Brent crude soaring 13% to US$82 per barrel – before settling back at US$77 – as the conflict rapidly extends across the Middle East. European gas prices surged more than 50% as Qatar shut down liquefied natural gas production at the world’s largest export facility after it was targeted in an Iranian drone attack.

The OPEC+ cartel of nations have agreed to increase oil output by 206,000 barrels per day during April, but with the crucial Strait of Hormuz likely to be closed for some time – and one analyst saying the conflict could push up the price of European gas by 130% – it’s unclear whether the increase can help contain oil price rises in Australia or elsewhere. (The Guardian)

The shockwaves from the Iran conflict mean Australians face surging prices and inflation in what has been described as a “nightmare scenario” for RBA officials that are today weighing their next move on interest rates, just weeks after inflationary pressures drove them to implement the first rate rise in years.

Expert view

“Every major geopolitical shock in an oil-producing region quickly becomes an energy and transport crisis. When transport systems are built around oil, conflict thousands of kilometres away can translate into higher costs, supply disruptions and economic instability at home.

As long as transport and freight rely heavily on oil, countries remain exposed to geopolitical risk. Reducing oil use through electrification, public transport investment and alternative fuels is critical for long-term resilience. Moving away from oil is as much about stability and security as it is about climate action.”

Hussein Dia
Professor of Transport Technology and Sustainability, Swinburne University

Catch Up

Projects

Fortescue (ASX: FMG) has halved the size of its proposed Bonney Downs wind farm, cutting the number of wind turbines from 200 to 100 in a move it says will reduce the project’s environmental footprint. The wind farm will now require the clearing of just 944ha of vegetation on the nearly 90,000ha development envelope, down from 2,000 in early estimates. Writing in an environmental approval application, Fortescue said it considered converting the Solomon power station to run on green ammonia/hydrogen but ruled it out as it “is not economically viable”. (AFR)

Japanese and Korean customers, however, have shown enough interest in green ammonia offtake to support phase 1 of InterContinental Energy’s Western Green Energy Hub, which will deliver at least 1.4Mtpa of green ammonia offtake when it comes online in 2033 and up to 28Mtpa when it reaches full production capacity in 2050. That level of interest, InterContinental Energy CEO Alexander Tancock said, “reflects maturing confidence in the green hydrogen sector in Australia… [and] validates the alignment between Australia’s long-term vision and that of its strategic trading partners”. (ESD News)

Construction has commenced on the 1.8GW Hunter-Central Coast Renewable Energy Zone (REZ), with 590 construction jobs expected to be created as work ramps up to complete 85km of sub-transmission lines, 18km of underground fibre optic communications cable, new energy hubs at Sandy Creek and Antiene, and upgrades to existing substations. The project is the first REZ project to upgrade existing distribution poles and wires instead of building all new transmission lines.


Regulation

The AEMC has published a joint consultation paper to explore three rule change requests submitted by the AEMO. The requests relate to consultation requirements for metrology procedures, flexible communication requirement for SAPS generation connection points, and refining the eligibility requirements for secondary settlement points. Submissions close on March 26.


Policy

LNG projects in the Northern Territory will be subject to the federal government’s domestic gas reservation scheme, an Industry Department official has confirmed for the first time after questions were asked about the policy’s impact on developments like Japanese oil giant Inpex’s Ichthys $64 billion (US$45 billion) LNG project. The terminal was reportedly sited in Darwin, and connected to the WA gas field with a 900km pipeline, on the understanding that such rules wouldn’t apply in the NT. (AFR)


Data news

Australian consumption of automotive gasoline dropped markedly with the onset of the COVID-19 pandemic and has not recovered six years later, DCCEEW’s latest Petroleum Production Report has confirmed, with consumption dropping from 17,348.5 million litres in 2019 to 15,134.3ML in 2020 – rising just 4.5% last year, to 15,817.6ML, despite 2025 marking record vehicle sales. Production of crude oil and condensate are also down significantly, declining by 54.7% and 18% over the same period.


Climate

“Deep, sustained reductions in transport emissions are required well before 2035 to avoid locking in high cumulative emissions,” the Climate Council has argued in its submission to the government’s review of the Electric Car Discount. Citing the Climate Change Authority’s own advice on the importance of rapid electrification “across the economy”, the Climate Council notes that increasing EV adoption is essential not only for reducing emissions, but also promises benefits for grid stability by functioning as flexible load and, over time, distributed storage through vehicle to grid (V2G) technologies. These benefits, it argues, necessitate the strengthening of the Electric Car Discount “as a core climate policy instrument.”


People

Corporate and commercial legal firm Hamilton Locke has appointed long-term executive Brit Ibanez as managing partner. Ibanez most recently served as deputy managing partner alongside Nick Humphrey, who has been promoted to executive chairman.


Random

He was a peer of Thomas Edison and Nikola Tesla and is credited with making critical discoveries about the behaviour of magnetism, but Charles Protus Steinmetz is also being recognised for an entirely different obsession: his belief that electric, rather than petrol, vehicles were the future of transportation. Steinmetz, who loved driving his 1914 Detroit Electric sedan around his hometown, typed out an EV manifesto in 1920, highlighting their low maintenance, reliability, simplicity of operation, and lower cost – while acknowledging their limited range, slower speeds, and dependence on charging stations. (IEEE)

What's On

March 3
Clean Energy Investor Group Conference

Victorian Energy Minister Lily D’Ambrosio will headline this Melbourne event also featuring ENGIE Australia Managing Director of Renewables and Batteries Laura Caspari, SEC Vic CEO Chris Miller, Queensland Renewable Energy Council CEO Katie-Anne Mulder, VicGrid CEO Alistair Parker, and Squadron Energy CEO Rob Wheals.


March 4-5
Energy Consumers Australia Foresighting Forum

Luis Gonzalez, Chief Data and AI Officer at Aboitz Power, Robert Gross, Director of the UK Energy Research Centre, and Harriet Thomson, Associate Director at the Glasgow Centre for Sustainable Energy will keynote this Sydney event. Industry speakers include EnergyAustralia CEO Mark Collette, Essential Energy CEO John Cleland, and Tim Jarratt, Group Executive, Market Development & Strategy, Ausgrid.


March 9
Understanding the draft reliability arrangements in the ECGS

The Australian Energy Market Commission will hold a public forum to discuss draft determinations on the implementation of a reliability standard and related reliability tools for the East Coast Gas System.


March 10
Orchestrating Consumer Energy Resources to Benefit Customers and Strengthen the Grid

AGL CEO Damien Nicks will keynote this Australian Energy Council event in Melbourne. Other speakers include AEMC Chair Anna Collyer and AEMO Executive General Manager, Policy & Corporate Affairs Violette Mouchaileh.


March 18-19
Energy Storage Australia

NEM Review’s panel chair Tim Nelson; Hydro Tasmania’s Erin van Maanen, Energy Security Corporation CEO Paul Peters, and Indigenous Energy Australia’s Michael Frangos will join a host of other industry and technology specialists at this Sydney event.


March 19
Powering the future: Sustainability of mining energy transition materials

The Melbourne Energy Institute will welcome Monash University’s Dr Nikolas Kuschnig for a session exploring the sustainability of mining energy transition minerals. The one-hour session, starting at 2pm online and in person at the Melbourne Connect building in Carlton, will explore the lack of information about artisanal and small-scale mining (ASM) and the impact of uncertainty on the supply of metals critical for the energy transition.


March 24
Powering WA's Regions: Remote and Offshore Renewables

The Clean Energy Council will hold a panel session at Perth’s Golden Ballroom Centre, with speakers including Sabine Powell of DNV Australia, Vi Garrood of Horizon Power, Thomas Friberg of Zenith Energy, Emma van der Velde of GHD, and Nicole Blackburn of Schneider Electric (Australia).

The Energy

The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.

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