26 Apr Asian Investor Demand for Australian Renewables
In recent years, the demand for renewable energy projects in Australia has grown exponentially.
Currently, Australia’s energy mix is still dominated by fossil fuels, with coal and natural gas accounting for around 85% of the country’s electricity generation. Renewable energy sources, such as solar, wind, hydro, and bioenergy, make up the only 15%.
According to the Australian Energy Market Operator (AEMO), there is currently a gap between Australia’s energy needs and the current energy provided by renewables. The AEMO’s 2020 Integrated System Plan (ISP) projects that to meet targets, Australia needs to rapid transition to a low-carbon energy system, renewables could provide up to 75% of Australia’s electricity by 2035.
That means that there is currently a 60% gap. This represents significant demand, that is getting Asian investors interested in Australian technologies and projects.
Australia’s energy needs are also expected to be shaped by a range of other factors, including population growth, urbanization, changes in industry structure, and advances in technology. For example, the growth of electric vehicles and battery storage is likely to increase demand for electricity, while the adoption of energy-efficient technologies could help to reduce demand.
The Australian government has set a target of producing at least 50% of the country’s electricity from renewable sources by 2030, and has also announced a goal of achieving net zero emissions by 2050. To achieve these targets, significant investment in renewable energy and other low-carbon technologies will be needed.
Australia FINALLY has clear government policies supporting a push for renewables, with clear targets in place and Asian investors take this market signalling from Government as a positive sign for the future.
Asia has been a significant source of investment in Australian renewable energy projects in recent years. Between 2015 and 2020, Asian investors committed over AUD 8 billion to Australian renewable energy projects. This represents 40% of the total investment into renewable’s in Australia over this period and is set to grow into the majority of investment by 2025.
Australia is seen as a safe bet for capital coming out of Asia due to demand for renewables, a perception that Australian innovation and project management is world class and clear government policies that are friendly towards equity and project funding into renewables.
It is therefore critical that owners of Australian renewable technologies and projects position themselves to attract capital out of Asia that is looking for a home in Australia.