Policy & Regulations Overview
The largest driver for renewable energy development recently has been the Renewable Energy Target. It was instituted in 2001 and then increased in 2009 to mandate that 41 TWh, or an estimated 20% of generation, come from large scale renewable sources by 2020. It was reduced by the Abbott government in 2015 to 33 TWh by 2020. Ironically, while one of the claims made to support this reduction was that industry wouldn't be able to achieve this level of construction, renewable generation in 2020 is likely to exceed the original target of 41 GWh.
There has also been a federal small scale renewable target that has driven strong uptake of domestic and commercial rooftop installation.
The federal government's scrapping of a successful carbon price mechanism in 2014 has created enormous energy policy uncertainty. A number of state governments, most notably Victoria, Queensland and the Australian Capital Territory which has now signed contracts to supply 100% of its demand from renewable sources, have stepped into this vacuum with their own reverse auction schemes, creating demand for new wind and solar generation. Corporate PPAs have also contributed to this demand for new projects.
Australia is now struggling with a lack of adequate transmission to connect new wind and solar generation in the areas where the resources are strongest and to provide the storage to support them. A range of regulatory processes are underway to kickstart these outcomes but results are yet to emerge.