The Clean Energy Regulator's Quarterly Carbon Market Report (QCMR) for Quarter 4 (Q4) 2022 shows promising signs of Australia's action to reduce emissions.
The report shows a surge in large scale renewable energy investment, a recovery in rooftop solar installations and confidence in the Australian Carbon Credit Unit (ACCU) market.
In 2022, renewables developers committed to building 4.3 gigawatts (GW) of new large-scale wind and solar capacity, up almost 50% from the previous year. Once constructed, these power stations can generate enough electricity to power every home in Queensland.
The Clean Energy Regulator (CER) Chair, David Parker said that with 60% of the capacity announced in the second half of 2022, there appears to be renewed investment confidence in Australia's large-scale renewable energy market.
Rooftop solar PV investment by households and businesses also rebounded strongly in the second half of 2022 with almost 315,000 systems totalling 2.8 GW of installed capacity for the full calendar year, up from the original estimate of 2.3 GW.
Mr Parker said that 2023 may be a record year if the trends seen in the second half of 2022 continue this year.
With over 19.5 GW of small-scale rooftop solar PV now installed, this virtual power station is large enough to generate more electricity than the largest coal power station in Australia every year.
"Consumers are taking advantage of shorter payback periods for rooftop solar to avoid rising energy prices. If this trend continues, households and businesses could install record additional capacity in 2023 of 3.2 GW," he said.
Total renewable energy generation in the National Electricity Market (NEM) averaged 35% in 2022, and we expect it will reach about 40% in 2023.
"This large step up in wind and solar investment - big and small - in the second half of 2022 is a positive step in transitioning our electricity system to the government's goal of 82% renewable energy by 2030," he said.
The proposed Safeguard Mechanism reforms paper and report from the Independent Review of ACCUs, both released in January 2023, have likely driven increased interest and confidence in Australia's carbon markets.
In the fortnight following the release of the draft reforms and review, ACCU spot prices hit a 9-month high of $39 with reports of more than 3.2 million ACCUs in spot and forward trades before settling back down to around $36.
17.7 million ACCUs were issued in 2022 and this is expected to exceed 18 million in 2023. 385 projects were registered, bringing the total portfolio to 1,434.
