Delays and changes to grid connection rules have become a major concern for developers of wind, photovoltaic and energy storage projects in Australia, and have exceeded the long-term investment certainty.
According to the Australian Clean Energy Commission's latest survey of 60 energy industry executives, grid connectivity has become a major concern due to delays, regulatory changes, cost overruns, and market operators' assessments of the grid. For example, in northwestern Victoria, there is simply no ability to deploy new projects.
This has had a major impact on the energy industry, with some PV and energy storage projects being delayed or abandoned, while contractors are in trouble due to high costs, missed payments and damage claims.
The collapse of the engineering and contracting giant RCRTomlinson and its exit from the photovoltaic industry is one of the most interesting examples in the industry.
KaneThornton, chief executive of the Australian Clean Energy Commission (CEC), said that many corporate executives currently list grid connectivity and grid access as the top business challenge facing the energy industry, with policy uncertainty behind.
He said in a statement: "We acknowledge that grid operators and energy companies are dealing with more applications connected to the grid, but project developers need transparency and certainty to determine how long this process will take and possibly the cost of."
He quoted an executive as saying, "The grid connection and network access approval process for new renewable energy products is very slow."
Another executive said: "The continued changes in applicable GPS (Generation Performance Standards) by network service providers and Australian Energy Market Operators (AEMO) have severely undermined current confidence. This affects all stakeholders, including NSP. Owner."
The industry blamed various reasons for delays and limitations in changing rule target positions, lack of expertise of staff (such as network modeling, consulting, and developers), and insufficient physical capacity of the grid.
Australian energy market operators acknowledged the impediment and announced their integrated systems plans and their preferred plans to eliminate Victorian grid congestion. New South Wales is also focusing on the investments required to allow large amounts of wind energy and photovoltaic queuing connections.
The Australian Clean Energy Commission (CEC) survey shows that the Australian federal government lacks any policy direction after completing the current renewable energy target, which means that this is still one of the major concerns of the industry. Thornton previously said that no subsidies are needed, but policy certainty is needed.
In the latest statement, he said, “State governments have taken steps to fill gaps in national climate and energy policies and encourage clean energy development, but the energy and business sectors are still seeking certainty.â€
Since Victoria is the only state in Australia with legislative goals, it is most confident. Secondly, New South Wales, although there is no clear goal, but in the next 15 years facing the inevitable fact of shutting down most coal power plants, Queensland also has the goal of achieving 50% renewable energy.
In 2018, investment in the energy industry hit a new high, with more than $26 billion in projects completed or underway in 2018. It is worth noting that more than 80% of respondents indicated that they will recruit new employees in 2019.
“If the Australian federal government actively supports the development of renewable energy infrastructure, corporate investment confidence will increase,†one executive said. The Australian Labor Party government announced its policy before the next election, which is expected to be in early March or May 2019, including the $5 billion “Energy Modernization Fundâ€.
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