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Australia sets record of 7 GW of renewable energy capacity additions in 2020: regulator
Australia saw 7 GW of renewable energy capacity additions in 2020, the country's highest single year of additions, according to a report released by the country's Clean Energy Regulator earlier in March.
The 7 GW was nearly 40% higher than 2019's total, as well as exceeding the regulator's projection of 6.3 GW for the year. The jump was driven in part by an increase in rooftop solar installations and partially by several utility-scale solar and wind projects coming online at the end of 2020, ahead of their scheduled start-up dates in early 2021, said David Parker, chair of the Clean Energy Regulator.
"Australia has added, on average, more than 6 GW of renewable capacity each year since 2018. This level of investment is expected to continue through to 2022," he said.
The 7 GW of new renewable capacity places Australia in the top 10 markets globally last year, but it ranks even higher relative to the size of the Australian generation fleet, said Logan Reese, research and analysis associate director at IHS Markit in Brisbane.
The quarterly carbon market report revealed that rooftop solar capacity additions were higher in 2020 than any other year despite COVID-19 restrictions that put a strain on installation crews and the ongoing reduction in federal and state subsidies, Reese said. The reduction in subsidies was due to the continued decline in the cost of solar installations and homeowners' efforts to reduce electricity bills, he added.
Large-scale renewable energy target met
The report also confirms Australia met its large-scale renewable energy target of 33,000 GWh. The Clean Energy Regulator expects the large-scale renewable energy target to hit 40,000 GWh in 2021.
"This [33,000 GWh] target was met in 2019 and confirmed in 2020. The target was initially set at 40,000 GWh, but was scaled back. The 33,000 GWh projection is important because that means there will be more large-scale renewable electricity generated in 2021 than available large-scale generation certificates, which will reduce the revenues for large-scale renewable generators and increase the value of the large-scale certificates," Reese said.
"Large-scale" refers to renewable generators with capacity greater than 100 kW, while the certificates are a type of subsidy that can be created by surrendering the certificate to the government, or by selling the certificate on the open market, according to Reese.
"The thought was that the supply of certificates on the market is capped at 33,000 GWh, but I expect the market demand to continue increase, thus increasing the value of the certificates," he added.
Record 16 million ACCUs issued
The report also highlighted another record - the issuance of 16 million Australian carbon credit units (ACCUs), which are administered through the voluntary Emission Reduction Fund (ERF), set up in 2015. The ERF replaces the Carbon Tax scheme introduced in 2011 by Australia's Labor Party, but repealed by the Liberal-National coalition after it won the 2013 federal elections on a campaign to "axe the tax."
"ACCUs are a way for projects to receive financial incentives for reducing carbon emissions. These credits can then be traded on the open market or surrendered as a way for corporations to meet their voluntary emission reduction goals," Reese said.
The fourth quarter of 2020 also saw the highest quarterly registration of 71 ACCU and ERF-related projects since the third quarter of 2015, taking total project registrations for the year to 158. These are projects that participate voluntarily in the ERF to receive ACCUs, many of which are land use projects.
The Clean Energy Regulator is in the process of consulting on the design of a new "Corporate Emissions Reduction Transparency" report to help corporations reporting their national greenhouse and energy use demonstrate how they are meeting their voluntary emissions reductions goals.
No official net-zero target
Australia does not officially have a net-zero target, although all states within the country have set their own targets. The federal government set a benchmark that calls for a 26% to 28% reduction in emissions from the 2005 level, which was 617 million mt of carbon dioxide equivalent.
While the federal government has implemented initiatives to support the uptake in renewable generation capacity and reduce carbon emissions, it has been reluctant to implement new programs, update the country's Paris Agreement targets, or tax emissions, Reese said.
The federal government is also pushing for the development of new low-carbon technologies to be economically competitive with existing technologies while continuing to support the exploration and development of Australia's fossil fuels, he added.
Emissions from other sources have also not shown any significant reduction since 2005. Many of these sources, such as transportation, are emitting considerably higher levels of carbon now than in 2005, although 2020 saw a drop in emissions due to the COVID-19 restrictions, Reese said.
"The path towards [Australia's] Paris Agreement targets is driven by the assessment of emissions from land use. Outside of land use emissions, Australia is not making significant progress to reduce emissions that would meet the Paris Agreement. However, emissions from land use, specifically the estimated change in those emissions from 2005, could result in Australia officially meeting their Paris Agreement," he said.
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