Energy analysts at leading investment bank Deutsche Bank predict the state of South Australia could easily beat its aspirational target of 50% renewables by 2025, reaching 85% mark by 2020 and possibly as much ass 95% by 2025.
The prediction is included in scenarios included in a new analysis of the soon-to-floated renewable energy company Tilt Renewables, a spin-off of New Zealand’s TrustPower.
South Australia officially sources around 40% of its electricity from wind energy, and another 6% from rooftop solar. But with the completion of two new wind farms in the next 12 months – Hornsdale II and III – the share will likely total more than 50%, nearly 10 years before the government’s aspirational target.
Deutsche Bank believes that share will continue to grow, given its excellent wind and solar resources, its stated ambition to attract another $10 billion in renewable energy investment, and the impact of the federal renewable energy target.
“We expect the state to easily achieve this,” Deutsche Bank says of the 50% target, given the state’s significant development pipeline.
By 2020, thanks to the federal RET and the fact that it has a lot of projects in the pipeline – 2,200 MW of approved wind projects and approaching 1 GW of proposed solar projects, South Australia could more than double its renewable energy share by 2020 to 84.6% (see above) and go even further by 2025.
“We assess that after closures the state would be long 4.5 TWh of energy and be 95% renewable – far above the current 50% target.”
It’s a mind boggling figure, and one that we have canvassed in the past. It would, of course, depend on sufficient capacity and storage of some sort to be installed in the state, and it does depend on much of the existing projects going ahead.
But it indicates the sort of change that is at hand. It also underlines the point that if South Australia is going to attract $10 billion in clean energy investment, it will be achieving a renewables share vastly superior than its current target.
Deutsche Bank also notes that while the federal government does not have a renewable energy policy that goes beyond 2020, state-based targets will likely further increase investment in renewables beyond 2020.
It says Queensland will like add a further 25,000 GWh by 2030 to meet its 50% renewable target by 2030, and Victoria will add 7,000 GWh of renewables by 2025. These will help Australia reach around 42% renewable energy by 2030, according to Deutsche Bank estimates.
The Deutsche Bank analysis also predicts that coal generation capacity will also halve across Australia by 2030, mostly due to the fact that many coal plants will reach the end of their normal life and won’t be worth the expensive of upgrades.
This will leave some states – such as Victoria and New South Wales (short of energy), and others such as South Australia and Queensland long on energy. It is likely to lead to a completely reshaped market, although Deutsche suggests that 3 GW of thermal capacity could be refurbished.