Antinuclear

Legislation for the new RET — reduced earlier this week from 41TWh of annual power generation to 33TWh, following a review initiated by the ruling Liberal coalition more than a year ago — will likely pass through both houses of the Australian Parliament within a matter of weeks.

But solar and wind developers will probably not start signing PPAs en masse until energy retailers begin offering agreements with sufficiently attractive pricing conditions, Leonard Quong — a Sydney-based analyst for Bloomberg New Energy Finance (BNEF) — tells Recharge.

And although the revision of the RET will significantly dent renewables development — BNEF expects utility-scale investment to fall by 29% from the original 41TWh target to roughly A$14.7bn through 2020 — the bipartisan nature of the compromise is a welcome development in that it restores much-needed certainty for investors.

“Large-scale renewable energy developments have 10 or 15-year lifetimes and (investors) are looking to get their money back over those periods… and that will span at least more than one electoral cycle,” says Russell Marsh, director of policy at the Clean Energy Council (CEC) in Melbourne. “So it’s been important to get the bipartisan support and that’s why we’ve reluctantly accepted a lower target.”

Developers will likely bring about 6GW of fresh renewables capacity on line under the revised 33TWh target. But Marsh argues that it is “too early” to say how much of that build-out will be solar or wind.

“Trying to assess exactly what will get built between now and 2020 is really hard. And we haven’t even tried to predict it,” he says.

Angus Gemmell, managing director of PV developer Solar Choice, acknowledges that the nation’s wind pipeline may be more advanced than the solar that is currently slated for development.

“But in Solar Choice’s case — because we have not been sitting on our hands over the past two years — we’ve been getting our pipeline advanced and ready while most entities have been static,” he says.

The Sydney-based company — which hopes to soon move forward with the first stage of what could end up being Australia’s biggest solar project — has a clear head-start on other prospective PV developers.

But Gemmell — who says that Solar Choice is now negotiating with a shortlist of undisclosed parties to invest in the company’s planned 2GW to 2.5GW Bulli Creek array near Toowoomba, in the state of Queensland — says that other PV developers will likely catch up by 2017.

“We also have a very well-developed pipeline of planning-approved sites,” he adds, noting the company’s plans to install 300MW at Gannawarra, Victoria, and up to 1GW near the Whitsunday Islands, Queensland. “We’re well advanced with investors and we’re able to compete head-on with wind.”

A key element of the recent RET compromise is that the ruling Liberal coalition agreed to scrap the biennial reviews of the policy that had previously been in place.

“It removes the uncertainty factor that has been plaguing the RET for many years now,” Gemmell​ says.

Yet while the bipartisan compromise is a welcome development for the industry, the victory is still bittersweet.

“We’re both relieved and disappointed at the same time. We’re relieved in the sense that the pace of our PPA discussions and negotiations are picking up considerably. And we’ll have some clear visibility on building the first major stages of our projects,” he concludes, noting that Solar Choice may now be able to start construction at Bulli Creek at some point in 2016.