The latest update from the Clean Energy Regulator this month found there was 6553 megawatts of capacity from renewable energy projects under construction or already built – this is above the 6400 megawatts of capacity required to meet the RET.

The RET requires 23.5 per cent of Australia's energy – or 33,000 gigawatt hours – to come from clean energy sources by 2020, with key investments to keep flowing out until 2030.

The CER said there was also an additional 1454 megawatts of projects subject to power purchase agreements that are likely to be fully financed and under construction this calender year.

Almost half of the 6553 megawatts under construction has already been accredited and generating large-scale generation certificates (LGCs), with a further 1592 megawatts having applied for accreditation and expected to soon be generating them.

Rush to invest

"We expect the 2020 Renewable Energy Target to be exceeded at current build levels," the Clean Energy Regulator said.

"The judgment that the RET will be exceeded takes into account the effect of updated AEMO marginal loss factors and expected curtailment as a result of network congestion. The Clean Energy Regulator is aware of other projects that are likely to be announced in the near term."

The rush to invest in renewable projects past 2020 is also likely to result in a big drop in the price of LGCs, which will embolden clean energy industry advocates to debunk claims that renewable projects can only get off the ground if they have heavily subsidised by taxpayers.


Bloomberg New Energy Finance said there was a record $12 billion in renewables investment in Australia in 2017, with $3.2 billion so far this year. But Green Energy Markets Renewable Energy Index estimated there was more than $20 billion projects under way, contracted or under tender that would add 9691 megawatts of new capacity to the NEM by the early 2020s.

Bloomberg New Energy Finance's Australia head Kobad Bhavnagri said there was likely to be a tapering of renewable investment in the lead-up to 2020 given the target had been met and even exceeded. The price of LGCs were likely to stay low now the RET has been met.

He said the investment was likely to be lower in future years unless the federal government increased the 26 per cent target under the NEG, either from a change of heart from the Coalition or an in-coming Labor administration.

"It's likely to taper in 2018 and then collapse after 2020 because the National Energy Guarantee requires very little investment to be met," Mr Bhavnagri told The Australian Financial Review.

"It's more likely to be stop-start in the future to replace the exit of coal-fired generation [like AGL Energy's Liddell in 2022 and Delta Energy's Vales Point in 2028]."

Surge in solar

Under Bloomberg's projections, Australia will reach 23 per cent below 2005 level emissions by 2020 – meaning Australia will only need to achieve 3 percentage points over a decade to achieve the NEG target, something which Mr Bhavgnari believes will be achieved through the on-going rollout of small-scale solar.

A Climate Council report released this week found there were now 40,000 commercial solar systems installed in Australia, an increase of 60 per cent between 2016 and 2017.


Pacific Hydro's 80 megawatt Crowlands wind farm near Ararat in Victoria, which secured $80 million in project financing this week, is an example of the money flowing into renewable energy projects.

The Crowlands wind farm, which will comprise 39 wind turbines and create enough energy to power the yearly needs of about 50,000 Victorian homes, was financed by the Commonwealth Bank of Australia and the National Australia Bank. It is the first project to be supported by a long-term power purchase arrangement with a group of corporates through the Melbourne Renewable Energy Project.

Planum Partners managing director Shaun Newing, who helped pull together the finance for the Crowlands project, said there was strong interest from banks to invest in renewable projects.

"We are seeing a lot of activity in that space. These projects are never easy to do. It depends on the quality of the sponsor and the quality of the revenue streams. But all the banks are well set up to finance renewable projects. They are keen to get involved," Mr Newing said.