Investment in Australia flowing to renewables, not coal-fired power

• 5 years ago (2019-02-18)
• David Flin

Australasia 51 Coal 278 Renewables 753

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One of the biggest funders of energy projects in Australia said that coal-fired power generation projects were unlikely to be developed unless there was taxpayer funding involved, as investment continues to flow to renewables.

David Scrivener, Head of Infrastructure and Utilities for Westpac, one of the biggest funders of energy projects in Australia, said that investors were backing wind and solar projects, despite the policy settings from the Australian Government. He said: “From a commercial sector, you have to look at the consistency of building a coal-fired power station with the Paris climate commitments for Australia and net zero emissions. It would appear incongruous from the perspective. To my mind, if we are to meet the Paris commitments, it is hard to see coal-fired power as a long-term part of that transition.”

Over the past 24 months, Westpac has lent over $800 million to the Australian renewable energy sector, supporting construction of 14 renewable energy projects with an aggregated capital cost of over $5 billion. These projects, when completed, will have a combined installed capacity of over 3 GW. Scrivener said that the dramatic fall in the cost of renewable energy was the main driver of investment flowing those projects, which are still underpinned by the Renewable Energy Target. Even with policy uncertainty over national energy policy, such as the failure of the Clean Energy Target, investors were not deterred.

“What we have seen in the last two years, because of the dramatic drop in the price of solar, is it has moved past the political debates. There has been a big jump in corporate PPAs, and there has been a big jump in renewable investment because it has become the lowest cost producer.”

Scrivener said that the bank had a policy only to invest in energy projects which would lower carbon emissions in the grid, making it unlikely to back any new coal-fired power stations.