The growth of renewable energy and distributed energy resources has changed the dynamics of the Australian electricity market. To meet the country’s growing energy demand and have an uninterrupted energy supply, stakeholders prefer battery-backed wind and solar farms. The share of renewable energy in the country had reached 21.5 per cent of the country’s energy mix by 2018 and is expected to exceed the dominated thermal energy by 2030, contributing 55.7 per cent of the capacity mix, according to GlobalData analysis firm.
GlobalData’s latest report, “Australia’s energy market outlook for 2030, 2019 update”, thermal energy dominated the Australian energy mix with an overall share of 67%, with coal dominating, with a maximum share of 36%. Photovoltaic solar energy is the most important renewable energy, with a 12.7% share, followed by wind and bioelectric energy with a 7.1% and 1.6% share, respectively. In addition, hydropower has a share of 11.6% in the same year.
Piyali Das, GlobalData energy industry analyst, comments: “However, Australia has an abundant coal reserve; the construction of a new coal-fired power plant has become a costly undertaking. Carbon risk, fluctuating market prices and rising expectations of environmental, social and governance exemplarity have led investors and debt providers to demand a higher rate of return. The government has also announced a 50-year lifetime limitation for coal-fired power plants.
The falling cost of renewable energy facilities and the introduction of sound policies to reduce pollution have led policymakers to focus more on renewable energy. The government has set a renewable energy target of 20 per cent by 2030 and the incentives associated with the target will drive significant investments. In addition, with a high potential for clean energy sources, the country is expected to generate 43.5 per cent of electricity from renewable energy by 2030. The National Energy Guarantee (NEG) is another promising opportunity to reduce emissions and ensure reliability in a dispatchable energy supply.