By Isabella Kaminski
A report by independent market analyst Datamonitor claims that the Australian renewable industry cannot make significant progress until legislation changes, despite the country's abundant renewable energy resources.
Datamonitor estimates that around A$45 billion of private investment will be required to develop the 20 GW of renewable energy capacity currently under development. Two thirds of this investment is for wind energy, for which no Federal funding provision has been made so far.
Frederik Dahlmann, Datamonitor analyst and author of the report, says: “Australia’s renewable energy market has great potential due to its tremendous natural resource availability. However the country is also blessed with abundant and cheap fossil fuels, which have locked it into a high-carbon energy future. A lack of a cohesive national policy on renewable energy development is preventing it from breaking out.
“Developers and utilities will struggle to make the most of renewable energy resources and finance and develop new capacity until a more joined up approach is taken.”
Australia has some of the world’s best wind resources along its southern coastlines as well as the highest average solar radiation per square metre of any continent in the world. According to Datamonitor, it has good potential in biomass, tidal and wave, and geothermal energy.
Australia's climate committee is due to publish findings on how the country can mitigate carbon emissions at the end of 2011, says the report, but until then renewable energy developers will have to continue to deal with legislative uncertainty and will need to lobby the government for action.
Dahlmann says: “Australia is not going to wean itself off fossil fuels any time soon. However it must start laying the foundations for renewable energy development sooner rather than later so an increase in investment can begin.
"Energy firms and green businesses can expect to endure at least another year of the same policy uncertainty that has consistently undermined low-carbon investments for the last five years.”