• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Latest

Australia Is in the Ideal Place to Become a Renewable Energy Powerhouse

Like 1

By Selva Freigedo, Friday, 27 November 2020

Australia is certainly the lucky country. We have plenty of resources. But Australia is also a renewables paradise with heaps of sun, wind, and space. This puts us in the ideal place to become a renewable energy powerhouse....

Australia is certainly the lucky country.

Yep, it holds the world’s record for going the longest time without a recession, close to three decades.

Australia also has plenty of resources. Coal, iron ore, natural gas, and gold among others make up some of our top commodities.

But Australia is also a renewables paradise with heaps of sun, wind, and space. What more could you ask for?

Australia is in the ideal place to become a renewable energy powerhouse.

Ernst & Young agree.

So much so that this week the company moved Australia up the rankings in their Renewable Energy Attractiveness Index. The index looks at 40 countries and ranks them in order of attractiveness when it comes to renewable energy investment and opportunities.

Australia is now number three, as you can see below, coming after the US (first) and China in second place.



Port Phillip Publishing

Source: Ernst & Young

[Click to open in a new window]

Australia is still making strides in renewables…

…even with the pandemic slowing investment…

…even when there are less incentives on the horizon after Australia reached its renewable energy target a year earlier than expected…

…and even with the Australian government still tooting gas for the recovery.

[conversion type=”in_post”]

The Future of Renewable Energy in Australia

One factor for Ernst & Young’s optimism is energy storage.

Australia is on track to add 1.2GW in energy storage this year. This is over double the number from last year. Behind the meter capacity is also looking to grow by 581MW this year, with a big push from South Australia and Victoria who have been giving households subsidies to install batteries and lower their energy costs.

Ernst & Young forecast energy storage system costs could drop by 27% over the next five years.

And here is why this is important:

‘By 2025, the levelized cost of electricity of solar-plus-storage and solar-and-wind-plus-storage are expected to be lower than that of gas plants, which should mark a tipping point for Australia’s renewables sector.’

But what’s even more exciting is that they have high hopes that Australia will become a renewable energy export powerhouse. And they think this could happen mainly because of two mega-projects Australia has on the pipeline.

One is Sun Cable’s Australia–ASEAN Power Link (AAPL) which has been awarded major project status. The energy project will provide renewable electricity to Darwin and Singapore by combining the world’s largest battery and solar farm and 4,500km cable. The project is set to be done by 2027 and costs US$16 billion.

The other is the Asian Renewable Energy Hub, which also recently got major project status. The proposed $36 billion energy project is looking to house 26,000MW of wind and solar photovoltaic panels with 3,000MW capacity. The project — backed by Vestas, Intercontinental Energy, Macquarie Group, and CWP Renewables — would export green hydrogen from the Pilbara region to Asia. It’s set to cost US$20 billion with exports starting in 2028.

Ernst & Young said:

‘The two mega-projects would elevate Australia to a renewable energy export superpower, but it must still be proven to investors that the projects are profitable and there is the know-how to conquer the complex technical challenges posed.’

Ernst & Young estimate that a stimulus program that includes clean energy to get out of our current recession ‘would create nearly three times as many jobs for every dollar spent on fossil fuel developments’.

But that’s not all that happened this week.

Yesterday during their 2020 investor day, Origin Energy said they are looking to get into the hydrogen exporting game too. Together with Japanese Kawasaki they are planning a 300 megawatt electrolyser in Townsville Queensland that will produce 36,000 tonnes of green hydrogen.

Becoming a renewable energy exporter will be crucial as some of our largest energy export markets — Japan, South Korea, and China — have said they’ll go carbon neutral in the next decades. With the US also committing to net-zero emissions by 2050, this brings it up to 70% of countries with two-way trade with Australia that have committed to net zero.

The shift from fossil fuels to renewables is well and truly on its way. This will be the most important energy disruption in 100 years.

And as my colleague Ryan Dinse says, renewables are only the beginning. The shift to green energy will also impact other investments, with more opportunities coming our way in what he calls ‘second-order effects’.

What will those be?

Stay tuned for more…

Best,

Selva Freigedo,
For Money Morning

PS: How to Find Promising Energy Stocks — Discover why the energy market is ripe for massive disruption and how to identify innovative energy stocks. Click here to learn more.

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Comments

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments
Selva Freigedo

Selva’s Premium Subscriptions

Publication logo
Fat Tail Investment Research

Latest Articles

  • Critical Metal Stocks: Following the Iron Ore Playbook
    By James Cooper

    How does inconceivable capex find its way into new mining projects? Answer: Higher commodity prices. James Cooper compares the iron ore boom from the early 2000s to what may lie ahead for critical minerals.

  • Copper traders: gettin’ jiggy with it
    By Callum Newman

    Copper has now broken into an all time high after threatening to do so for some time. There’s no reason to think it’s going to go down, either, if the market views Trump as serious. The race is on to buy up what you can before the tariff goes into effect.

  • Australia ain’t the USA…and that’s great!
    By Callum Newman

    The outlook for Australia and the ASX are very different to the US and US shares. Here’s why…

Primary Sidebar

Latest Articles

  • Critical Metal Stocks: Following the Iron Ore Playbook
  • Copper traders: gettin’ jiggy with it
  • Australia ain’t the USA…and that’s great!
  • The biggest infrastructure spending boom in history just kicked off
  • You Read it Here First: Great Asset Rotation Underway

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988