The economics of building new wind farms in Australia is “getting worse, not better,” the CEO of one of Australia’s biggest energy utilities has warned, as rising construction costs, connection and transmission delays, and a fickle off-take market increasingly block the path to final investment.
Origin Energy CEO Frank Calabria says the soaring cost of building new large-scale infrastructure is an economy-wide problem, but is “showing up most visibly” in the energy sector given the scale of the projects that need to be delivered.
Within the renewable energy sector, it is wind farms that are feeling the economic pinch most keenly.
“The cost of developing a wind farm today is roughly 50 per cent higher than it was in 2020,” Calabria told the Australian Energy Council conference in Sydney on Thursday.
“Wind projects that were bankable a few years ago, are now finding it very hard to clear the hurdle. That is a problem, because wind is essential to the system we’re building.”
