Investment in renewables continue to drive down emissions

The latest Quarterly Carbon Market Report has shown that almost a third of electricity generated in the National Electricity Market in Q3 (32%) came from renewable energy sources. 

Averaged across 2021, renewables will likely contribute 30% of all National Electricity Market generation, double the 15% renewable energy in 2017. Rooftop solar is leading the way and, in 2021, will set a new record of approximately 3.2 GW added capacity, despite extended lockdowns in NSW and VIC which restricted rooftop solar installations. 

Rooftop solar is Australia’s largest power station, with a total generation capacity of 15.6 gigawatts of electricity. With lockdowns easing we expect total added capacity for the full year to set a record at around 3.2 GW. This is an increase from the 3.0 GW record set last year.  

Since 2018, an average of 6 GW of additional renewable energy capacity has been added to Australia’s grid per year and we expect a similar level of capacity will continue to be added next year. 

This last quarter also saw a very strong result for final investment decisions (FID) in large-scale renewable energy with 1.1 GW of new capacity announced. This is an important lead indicator that we can expect to see many new large-scale renewable energy power stations being constructed around the country. We are expecting a further strong result either in Q4 this year and/or Q1 next year and believe annual capacity reaching FID may be trending up.  

2021 is also shaping up as another record year for the Emissions Reduction Fund which is experiencing strong growth with 54 new projects registered in the quarter and supply of ACCUs expected to reach 17.3 million for the year, up from 16 million in 2020. 

Private demand for Australian units and renewable energy certificates also rose over the quarter– up 24% compared to the same time last year – as more and more businesses take action to reduce their net emissions. 

Companies can now publicly show their net emissions position, and how they are tracking towards their emissions reduction targets, by opting-in to the Corporate Emissions Reduction Transparency Report.  

Read the latest QCMR for more important insights into Australia’s carbon market.