Australia is on track to miss its crucial 2030 clean energy target, a coalition of major investors has warned, citing a dramatic and worrying slump in financial commitments to new solar and wind projects.
Investment Dries Up Amid Policy Uncertainty
The stark warning comes from the Investor Group on Climate Change (IGCC), which represents institutional investors managing a colossal A$30 trillion in assets globally. Their new analysis reveals a precipitous decline in final investment decisions for large-scale renewable energy generation.
According to the data, financial commitments for new solar and wind farms in Australia plummeted by approximately 70% in 2024 compared to the previous year. This alarming drop follows a decade-high level of investment in 2022, indicating a rapid and severe reversal of fortune for the sector.
The IGCC points directly to persistent policy uncertainty and delays in crucial reforms as the primary culprits stifling investor confidence. Key concerns include ongoing holdups to the national 'Capacity Investment Scheme' and significant bottlenecks in connecting new projects to the electricity grid.
A Looming Gap in the 2030 Target
This investment slowdown poses a direct and immediate threat to Australia's legislated goal of generating 82% of its electricity from renewable sources by 2030. The current trajectory, based on the rate of new financial commitments, suggests the country will fall severely short.
Rebecca Mikula-Wright, chief executive of the IGCC, emphasised the scale of the challenge. She stated that to meet the 2030 target, the rate of building new renewable capacity needs to triple immediately. "The current investment slowdown is a red flag," she said, urging both federal and state governments to accelerate the rollout of supportive policies and infrastructure.
The analysis underscores that while Australia has a substantial pipeline of potential projects, the conversion of these plans into financed and constructed assets is stalling. Without a rapid correction, the nation risks not only missing its climate commitments but also facing higher energy prices and reduced energy security.
Urgent Calls for Government Action
The investor group's report serves as a powerful call to action for policymakers. The IGCC is urging governments to provide greater clarity and stability in the regulatory environment to unlock the capital required for the energy transition.
Specific recommendations include:
- Expediting the full implementation of the Capacity Investment Scheme to underwrite new renewable generation and storage.
- Accelerating crucial reforms to the national electricity grid to unblock connection delays for ready-to-build projects.
- Providing a clear, long-term policy roadmap that gives investors the certainty needed to commit billions of dollars over multi-year timeframes.
The warning highlights a critical juncture for Australia's energy future. With the 2030 deadline drawing closer, the window to catalyse the necessary investment and construction is narrowing rapidly. The decisions made by governments in the immediate term will determine whether the country can regain its momentum and deliver on its clean energy promises.
