The latest analysis of the state of clean energy investment in Australia by the Clean Energy Council has revealed a material loss of jobs in the sector due to the increased risk and corresponding slow-down in financial commitments in large-scale renewable projects.
The findings come off the back of this week’s Intergovernmental Panel on Climate Change’s Sixth Assessment Report, which sets out that a transition to 100 per cent renewable energy should be prioritised to mitigate the worst impacts of a looming climate catastrophe.
The first two quarters of 2021 delivered just 1300 peak construction jobs in the first two quarters of 2021 – a loss of 2700 jobs and a 67.5 per cent decrease on the same two quarters of 2018.
“This is a significant loss for the Australian economy at a time when it’s critical to get our nation moving again,” said Clean Energy Council Chief Executive, Kane Thornton.
“This represents a major loss of jobs in critical areas such as civil and electrical engineering, project management and logistics as well as the associated jobs in local communities supporting these large construction projects.”
Falls in employment in our sector have been the result of lower investment levels.
Just three projects reached financial close in the second quarter of 2021 – the Woolooga and Edenvale solar farms in Queensland and the West Wyalong Solar Farm in New South Wales. The two Queensland solar farms boosted capacity by over 350 MW, making it the state’s second-best quarter on a capacity basis since Q4 2017.
So far this year, the quarterly average of newly added capacity is just 432 MW, which is 29 per cent lower than the 2020 quarterly average and 70 per cent lower than the quarterly average seen in 2018. There has been just one wind farm reach financial close in the past 18 months, compared to 17 in 2018.
“Investment in clean energy has fallen to levels not seen for several years as a result of the increased risks facing investors, including from grid connection and network constraints as well as the ongoing unpredictable and unhelpful government policy interventions and market reforms,” said Thornton.
Unfortunately, the continued resistance from the Federal Government to long-term and meaningful carbon targets in the energy sector as well as continued unpredictable energy policy interventions weigh heavily on investor confidence.
While reform of the Australian energy market is long overdue, some of the reforms proposed by the Energy Security Board (ESB) through the post-2025 market review are creating further anxiety and uncertainty for investors. The ESB appears to be proposing the establishment of a capacity mechanism that risks further extending the life of aging coal generation as well as dramatic and unnecessary changes to access arrangements. The so-called ‘congestion management mechanism’ could introduce significant price uncertainty for new renewable generators and storage and make it increasingly hard to invest in these new clean technologies.
“While the competitiveness of renewable energy and energy storage continues to improve, without the necessary policy and regulatory certainty, investors will continue to face materially higher risks in Australia than the many other countries who are unequivocally focused on accelerating clean energy investment,” said Thornton.