Latest News

All the latest news from Energy & Resources Law


Trends in the Australian renewables market

In its Australian Renewables Report 2021, MinterEllison looks at trends in the renewable energy market and identifies opportunities for the future.

While the COVID-19 pandemic has significantly impacted many markets, investor confidence in renewables has been maintained with 65% of investors saying they will increase investment over the next 24 months. Australia is particularly attractive to domestic investors and those in the Asia Pacific seeking to manage global volatility. More than half of the respondents also said that the pandemic didn’t impact their strategy thanks to how Australia managed to control the spread of the virus.

There are several reasons that Australia is particularly attractive for investors including:

  • With more solar potential than any other developed nation, 79% of respondents cited our favourable climate and topography.
  • 74% of respondents cited greenfield opportunities as a significant positive to investing in Australia. This is thanks to the relatively low cost of acquiring land rights compared to other developed countries. 
  • Australian state and territory governments have also supported new and advanced renewables technology which is a drawcard for 67% of respondents. In addition the growth in ESG lending and investing is also encouraging for the industry, with many lenders actively decarbonising their portfolios. 
  • The favourable tax environment and rules-based legal system was cited by respondents as another drawcard, along with our political and regulatory stability. However, uncertainty around incentives for renewables was a detractor for 63% of investors. 
  • 86% of respondents believe that Renewable Energy Zones (REZ) are critical in facilitating further investment in renewables projects. At present, New South Wales, Victoria and Queensland have all committed to developing REZs to provide large-scale renewable energy generation and storage.

The areas with the greatest opportunity include solar, wind and batteries with low risk and ability to provide reliable energy generation. 81% of respondents believe that hybrid solutions that combine wind, solar and storage have huge potential for Australia. 

Hydrogen also continues to grow in attractiveness as it becomes less risky. 69% of respondents believe that Australia has the potential to become a primary supplier of hydrogen to energy markets in the next two years. 

Interestingly, there is a divergence in opinions regarding fossil fuels. While 47% of respondents believe government is acting quickly to retire coal-fired power stations, 27% believe steps are not being taken. This may be in part due to different policies between the states and the relative importance that coal continues to hold for Australia economically - it is our second-biggest export. 

Looking forward, international investors, particularly from Asia Pacific and Europe, are expected to continue to play an important role in Australia. The most active investors are expected to be renewables developers according to 99% of respondents. Power producers and investment funds are also expected to play an important role in the investor landscape. 

The report demonstrates that, despite a global pandemic and significant climatic events, there continues to be significant opportunity in Australian renewables. 

Showing 0 Comment

Comments are closed.
Subscribe to Newsletter