Australia’s large renewable investments hit new low

Spanish Market: Electricity
13/03/24

Financial investment commitments to utility-scale renewable energy projects in Australia reached their lowest level in several years in 2023. But they can get back on track with the expanded Capacity Investment Scheme (CIS) scheme, the Clean Energy Council (CEC) said today.

A total of A$1.5bn ($991mn) was committed to a combined 1.3GW of new large-scale renewable projects last year, down sharply from A$6.5bn for 3.8GW in 2022, the CEC said on 13 March in its annual report. This is the lowest level since it began tracking investment data in 2017.

The slowdown reflects issues such as a constrained electricity grid, slow planning and environmental assessment processes in some states, higher costs and tighter markets for equipment and labour, the CEC noted. But regulatory uncertainty also played a major role, as investments have been gradually falling since Australia met its Renewable Energy Target (RET) ahead of the 2020 schedule, with the scheme's end date of 2030 affecting investment decisions, it added.

Large renewable plants typically get accredited under the RET and can issue and sell Large-scale Generation Certificates, a key support mechanism that is scheduled to end at the end of 2030. The industry had been lobbying for the federal government to commit to a new long-term national policy mechanism, which led to the creation of the CIS in 2022 and its expansion last November.

The government plans to issue tenders every six months until 2026-27 to support 23GW of renewable generation capacity such as solar, wind and hydro and 9GW of dispatchable capacity such as pumped hydro and grid-scale batteries. Winners will need to start operating their assets by 2030, which could help the Labor party-led federal government meet its target of sourcing 82pc of electricity from renewable sources by 2030 across the National Electricity Market covering east Australia.

‘Urgent policy design' needed

While the expanded CIS could put Australia back on track, "urgent and careful policy design" needs to be carried out in this year's first half to ensure the programme realises its objective of driving up private-sector investment in the sector, the CEC said.

There were 56 renewable projects under construction as of December 2023 for a combined capacity of 7.5GW, down from 72 projects making up 9.5GW at the same point in 2022.

Australia installed 2.8GW of new utility-scale renewable capacity in 2023, up from 2.3GW in 2022 and a "solid number" according to the CEC, but well below the figure of at least 6 GW/yr estimated by the Australian Energy Market Operator for the country to reach the 82pc renewable target. Out of the total last year, 1.9GW came from solar and 942MW from wind compared with 841MW and 1.4GW respectively in 2022.

An overall 5.9GW of renewable additions were achieved in 2023, up from 5GW in 2022, driven by 3.1GW from rooftop solar compared with 2.7GW the previous year before, the CEC said.

New financial commitments to utility-scale batteries reached a record of A$4.9bn, including hybrid projects with a storage component. This was up from A$1.9bn the previous year, with capacity under construction rising to 5GW/11GWh at the end of 2023 from 1.4GW/2GWh in 2022.

Renewables accounted for 39.4pc of Australia's electricity generation last year, up from 35.9pc in 2022, the CEC said.

By Juan Weik

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13/03/25

Lower Rio Tinto Al output cuts New Zealand power demand

Sydney, 13 March (Argus) — New Zealand's industrial electricity demand fell on the year in October-December 2024, after Rio Tinto cut production at its Tiwai Point aluminium smelter in the previous quarter. The country's industrial electricity demand was down by 9pc compared with a year earlier, data from the Ministry of Business, Innovation, and Employment show ( see table ). Rio Tinto cut production at Tiwai Point in late-July 2024, after New Zealand utility Meridian Energy requested that it reduce its energy use by 205 MW. Many of the plant's potlines remained off line until late-September 2024, when Rio Tinto began restarting production at a reduced level. The Tiwai Point Aluminium Smelter is New Zealand's largest industrial energy user, consuming 572MW of power, often accounting for 12-13pc of national electricity demand, according to New Zealand's Electricity Authority. But it only accounted for about 10pc of total demand in October-December because of its lower production level. Rio Tinto's decreased power use and the country's rising geothermal generation in October-December pushed New Zealand's coal- and gas-fired generation to their lowest levels since late-2022. Utilities produced 2.1PJ from coal- and gas-fired generation, down by 73pc on the quarter and by 42pc on the year ( see table ). Coal- and gas-fired plants accounted for just 6pc of total generation in the fourth quarter of 2024, down from 19pc in July-September and 10pc a year earlier. Meanwhile, New Zealand's renewable power generation grew in importance over October-December, even as the government continued taking steps to promote coal- and gas-fired generation. The share of renewable electricity rose to 94.3pc, the highest level since December 2022 and the fourth highest on record. The New Zealand government is eager to promote oil, gas and petroleum generation, resources minister Shane Jones told Argus in December 2024. New Zealand's government has rolled back a ban on offshore gas exploration and has been fast-tracking coal developments since taking office in 2023. The country's largest utility, Meridian Energy, also warned of a structural gas shortage in late February, calling for new gas exploration. By Avinash Govind New Zealand Energy Quarterly Oct-Dec '24 Jul-Sep '24 Oct-Dec '23 q-o-q ± % y-o-y ± % Electricity Consumption (PJ) Industrial 11.0 10.1 12.1 8.7 -9.0 Total 33.7 38.1 35.2 -11.4 -4.3 Electricity Production (PJ) Coal 0.5 3.2 1.3 -84.9 -64.2 Gas 1.7 4.6 2.4 -63.8 -29.8 Geothermal 7.6 8.5 7.1 -10.9 6.6 Total 37.7 41.5 38.2 -9.3 -1.4 Source: Ministry of Business, Innovation, and Employment (MBIE) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Italian Bess necessary to reduce gas burn: Industry

11/03/25

Italian Bess necessary to reduce gas burn: Industry

London, 11 March (Argus) — As renewables become more prevalent in the Italian power mix, market participants support the buildout of battery energy storage systems (Bess) to replace gas-fired generation as a source of flexibility, Argus heard on the sidelines of the KEY25 Energy Transition Expo in Rimini last week. Italy has some of the highest electricity prices in Europe owing to the country's heavy reliance on gas-fired generation, with the single national price (Pun) averaging €107.75/MWh over 2024. While there has been a decrease in gas burn and an increase in renewables output since 2022, gas-fired generation still accounted for slightly over 40pc of the power mix on average last year, compared with combined solar and wind generation at 21pc. The Italian government has set ambitious renewable targets under the country's national energy and climate plan, aiming to reach 131.3GW — including solar, wind and hydro capacity — by 2030 from 77GW in January under Italy's climate and energy plan. There is general agreement among market participants that reducing gas burn in favour of renewable energy sources will lower electricity prices, but some gas-fired capacity may never be removed from the Italian power mix without having another technology that can provide the same flexibility at scale. Residual demand in Italy is falling, but thermal output remains essential to cover demand peaks during critical summer and winter periods, according to Italian transmission system operator (TSO) Terna's latest system adequacy report . But as renewables cover an increasing share of electricity demand — estimated to reach 335TWh in 2028 — thermal plants will become less economically viable and are likely to be decommissioned unless they are kept operating through ancillary services. "The more renewable generation we have, the less gas-fired plants will have to cover residual electricity demand. Only the most efficient — hence the cheapest — gas-fired plants will be accepted, and the others will be decommissioned," a power trader told Argus . But turning on a gas-fired plant from cold and with a stop-start operation would lead to exaggerated costs and higher maintenance prices. "Morning and evening prices could be used to cover the maintenance of the plant, and the average price would risk being the same but with very marked price differences," the head of power origination of an Italian utility told Argus . "This would lead to investing a lot in batteries that could exploit the spreads and lower them a bit," he added. Market participants attending the conference widely agreed that growing renewable capacity means there is a need to focus on the development of Bess, especially those with 6-8 hours duration to enable time shifting. Solar photovoltaic capacity is expected to grow by 6-8 GW/yr to 2030, according to industry body Italia Solare president Paolo Viscontini. The Italian energy ministry has recently accepted Terna's view that the country will need an additional 10GWh of Bess capacity by 2028 to avoid the risk of the grid becoming congested in periods of overgeneration. As of January 2025, Italy had 13.3GWh of Bess capacity — mainly in the south of the country and on the islands — and is expected to reach 50GWh by 2030. And Terna last week said it will hold its first auction for large-scale Bess with 2028 delivery on 30 September, for which it has already approved 9GWh, as reported by the operator's grid development manager Francesco Del Pizzo. Connection requests for Bess projects more than tripled in 2024 to 253GW worth of capacity, mainly because of a significant reduction in capital expenditure for the assets, which has dropped by around 40pc since 2022 and is expected to stabilise at a competitive price in the next few years. By Ilenia Reale Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ontario adds fee for electricity exports to US: Update

10/03/25

Ontario adds fee for electricity exports to US: Update

Updates with comments from US utilities Calgary, 10 March (Argus) — Ontario is imposing a 25pc tariff on electricity exports to the US starting today, carrying through on its threatened retaliation for a trade war started by US president Donald Trump. "We will apply maximum pressure to maximize our leverage, that's why today we're moving forward with a 25pc surcharge on electricity exports for the 1.5mn American homes and business that Ontario powers," Ontario premier Doug Ford said today in Toronto. Ontario was the largest exporter of electricity to the US in 2023, sending 15.2 TWh to New York, Michigan and Minnesota. The neighbouring province of Quebec, which exported 13.4 TWh the same year to New York and New England, has said it is also considering its options amid the trade war. Ford said he feels "terrible" because average consumers will pay when it is really Trump who is responsible. The surcharge will cost the US up to $400,000/d, amounting to an increase of $100 for consumers each month, according to Ford. "I will not hesitate to increase this charge," said Ford. "If necessary, if the United States escalates, I will not hesitate to shut the electricity off completely." Trump on 4 March imposed a 10pc tax on Canadian energy imports, a 25pc tariff on non-energy imports from Canada and a 25pc tariff on all imports from Mexico. But executive orders that he signed on 6 March exempted North American trade covered by the US-Mexico-Canada (USMCA) free trade agreement from new tariffs after 12:01am eastern time on 7 March. Trump has said he is delaying the tariffs on Canada and Mexico until 2 April, but his executive orders make no mention of that restart date. Minnesota Power, a subsidiary of Allete, imports "a small portion" of its electricity from Ontario but expects the impact to be "negligible", the utility said. Minnesota Power receives 11pc of its of its energy supply from Manitoba Hydro, but Manitoba has not followed Ontario's lead and imposed a surcharge. Michigan's largest utility, Consumers Energy — which serves 6.8mn of the state's 10mn residents — does not purchase power from Ontario. Xcel Energy, which serves customers in Minnesota and Michigan, also said it did not buy power from Ontario. By Brett Holmes and Anna Harmon Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

France's energy plan to allow new fossil-fired plants

10/03/25

France's energy plan to allow new fossil-fired plants

London, 10 March (Argus) — A revised version of France's 10-year energy plan, released for final public consultation, cuts a pledge to no longer build any more fossil fuel-fired power plants, while the government is pushing a bill that allows coal-fired plants to be converted to gas firing rather than shut down. The PPE3 plan, which sets out a roadmap for how France will change its energy system out to 2035 in order to comply with the country's goals to reduce greenhouse gas emissions, is now in the last stage of public consultation, several years after it was due to be finalised. The latest version maintains a pledge to phase out coal, with France's last two remaining coal-fired power plants set to close by 2027. But the pledge included in the previous version to "not build new electricity generation sites based on fossil energy" has been removed. And a pledge to "launch studies or pilot projects" to convert existing or build greenfield thermal plants using 100pc decarbonised energy has been watered down. It now promises simply to "help" operators of such plants launch studies or projects, and on fuels that are "less emitting" rather than completely decarbonised. A bill is currently passing through the French parliament that allows the country's two remaining coal-fired plants to be converted to gas operation. Gazelenergie, operator of one of the plants, hailed the bill when it was announced last month. It has the backing of the government, as well as of parliamentarians from across the political spectrum in the Moselle region, where one of the coal-fired plants is located. The new version of the plan also cuts ambitions for solar power as revealed last month , in light of views that the previous aim was too high given France's extensive nuclear fleet. The government now aims for 65-90GW by 2035, down from 75-100GW in the previous plan. It hopes to achieve this aim by launching two tenders per year of 1GW each for ground-mounted solar and three tenders of 300MW each for roof-mounted solar. The roof-mounted tenders "may be adjusted" according to changes made to subsidies, the government said. And one technologically neutral 500MW tender per year will be held. In the past, these tenders typically have been dominated by solar projects. The government has not explicitly decided on a separate tender for agrivoltaic projects, as the solar sector had called for, but it may decide to hold them, deducting any capacity called for from other solar buckets. The trajectory for solar is set at 5GW of projects assigned per year, for 4GW constructed, assuming 20pc of projects do not advance. This then could be modified upwards from 2028-29, to a maximum of 7 GW/yr, if increases in demand and flexibility justify it. On onshore wind, two tenders of 900MW each will be held every year in order to hold the trajectory of construction at roughly 1.5 GW/yr. France's electricity is already substantially decarbonised, thanks to its large nuclear fleet and renewables installations. Fossil fuel-fired plants will only be needed to cover demand spikes and ensure energy security, the government said in the consultation. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ontario adds 25pc tariff on electricity exports to US

10/03/25

Ontario adds 25pc tariff on electricity exports to US

Calgary, 10 March (Argus) — Ontario is imposing a 25pc tariff on electricity exports to the US starting today, carrying through on its threatened retaliation to a trade war started by US president Donald Trump. "We will apply maximum pressure to maximize our leverage, that's why today we're moving forward with a 25pc surcharge on electricity exports for the 1.5mn American homes and business that Ontario powers," Ontario premier Doug Ford said Monday in Toronto. Ontario was the largest exporter of electricity to the US in 2023, sending 15.2 TWh to New York, Michigan and Minnesota. The neighbouring province of Quebec, which exported 13.4 TWh the same year to New York and New England, has said it is also considering its options amid the trade war. Ford added he feels "terrible" because average consumers will pay when it is really Trump who is responsible. The surcharge will cost the US up to $400,000 each day, amounting to an increase of $100 for consumers each month, according to Ford. "I will not hesitate to increase this charge," said Ford. "If necessary, if the United States escalates, I will not hesitate to shut the electricity off completely." Trump on 4 March imposed a 10pc tax on Canadian energy imports, a 25pc tariff on non-energy imports from Canada and a 25pc tariff on all imports from Mexico. But executive orders that he signed on 6 March would exempt North American trade covered by the US-Mexico-Canada (USMCA) free trade agreement from new tariffs after 12:01am eastern time on 7 March. Trump has said he is delaying the tariffs on Canada and Mexico until 2 April, but his executive orders make no mention of that deadline. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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