Green energy, mining investment eases sting of slowdown

Australia's push for a net-zero economy promises long-term growth in utilities and mining, according to independent modelling.

The two sectors are "bright spots" despite signs that the broader downturn in the business cycle is starting to take a toll on overall investment, said Stephen Smith, lead author of the latest Deloitte Access Economics Investment Monitor.

All states and territories have significant clean energy projects under way or planned, as detailed in the report released on Thursday.

But there are calls for more rapid and targeted investment in renewable energy and grid-firming technologies to make sure the lights stay on as coal plants shut down across Australia.

As well as reducing greenhouse gas emissions, the project investment is a key source of future economic growth.

There are 60 utilities projects listed in the database as definite, worth a combined $46.1 billion, and another 143 projects worth a total $94.1 billion described as planned.

The largest expansion to the national electricity grid, the $5 billion CopperString 2032 project, will connect Queensland's North West Minerals Province to the largest renewable energy zone in the country and reduce a dependence on pricey gas.

Most electricity in the region is supplied through a separate power transmission and distribution network, predominantly sourced from gas-fired generation, resulting in more expensive energy costs for users compared to those connected to the grid.

Work under construction is led by NSW's $12 billion Snowy Hydro 2.0, Victoria's $3 billion Golden Plains Wind Farm and the $3 billion first stage of the Goyder renewables zone in South Australia.

Some 16 projects in Western Australia are worth a combined $6 billion, including waste-to-energy plants in Kwinana and East Rockingham.

The green energy transition is also expected to sustain investment in critical minerals and rare earths, Deloitte found.

There are around $29 billion worth of metals projects under construction and $25 billion in the planning stages.

Nickel and lithium prices have declined sharply due to an increase in global supply and weaker demand amid lower-than-expected electric vehicle sales, and are expected to remain "subdued" in 2024, Deloitte said.

Private sector projects also include data centre projects worth $22 billion to support new ways of doing business.

Microsoft is investing $5 billion in nine new data centres in Sydney, Melbourne, and Canberra, while Brisbane will host Quinbrook's $2.5 billion Supernode data centre and energy project.

Amazon Web Services' will spend $13.2 billion on an expansion of their Sydney and Melbourne data centres and cloud computing operations to support the digital economy.

With structural changes driving investment in areas such utilities, mining and software, business investment is expected to avoid a contraction, Deloitte said.

Overall, growth in business investment is forecast to slow to 2.7 per cent in 2024 and 1.7 per cent in 2025.

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