THE GROWING OPPURTUNITY WITHIN THE AUSTRALIAN RENEWABLE SECTOR

Unfortunately, with Australia’s main exports being coal, petroleum and iron ore, many modern-day Australians have lived with the belief that the Australian economy has to rely on the coal industry to survive, and that if Australia completely moves away from fossil fuels, then un-employment will skyrocket. According to the government’s own statistical agency, of the 12.9 million Australian workers in 2019 only 52,100 worked in coal mining with a further 28,100 employed in oil and gas extraction. When jobs in refining and energy supply are factored in, a generous estimate of employment in the fossil fuel industry is 133,100 people.

As modern-day Australians become more environmentally conscious, the myth that the Australian economy has to rely on fossil fuels is quickly being dispelled, leading to the scale of growth that the Australian renewables market has seen in the past year, with the 2020 renewable energy targets being achieved, many of the Australian states and territories have committed to a greater 40% target for renewable energy sources by 2030.

Although this is excellent news, renewable energy sources were only estimated to account for between 10-15% Australian energy consumption during 2020, with wind accounting for an estimated 40% of this figure and Hydro coming in at a close second, accounting for an estimated 28%.

The Renewable Energy Target (RET) scheme encourages the additional generation of electricity from renewable sources to reduce greenhouse gas emissions in the electricity sector. The Large-scale Renewable Energy Target (LRET) incentivises investment in renewable energy power stations, such as wind and solar farms, or hydro-electric power stations, by legislating demand for large-scale generation certificates (LGCs). One LGC can be created for each megawatt hour of eligible renewable electricity produced. LGCs can be sold to liable entities (mainly electricity retailers) who buy and surrender the LGCs to the Clean Energy Regulator to demonstrate their compliance with the scheme's annual targets. In turn, the LGCs provide the power station with a source of revenue additional to the sale of the electricity generated.

This is excellent news for the renewable energy sector as Australia commits to an annual target of 33,000 gigawatt hours of additional energy. Many believe hydrogen could play a key role in turning Australia into the Saudi Arabia of renewable energy.

“Countries such as Japan, Korea and Germany have already come to Australia, asking for us to export renewable hydrogen for their domestic energy consumption,” says Ken Baldwin, the director of the Energy Change Institute at the Australian National University. “We have enormous opportunities, to create wealth and jobs due to the demand for our energy from these countries.”

The fundamental shifts within the Australian energy system, represent a huge opportunity for innovative energy interventions both in technologies and business models. This is happening at a time when the Australian Government has put science and innovation on the national agenda, the current rate of growth within Australia’s renewable energy market, presents unique opportunity for investors and service providers.