Australia’s renewables chaos prompts solar exit of top EPC player

Facebook
Twitter
LinkedIn
Reddit
Email
Downer's decision not to take on new solar construction work comes after the firm helped deliver Neoen's 128MWp Numurkah project. Image credit: Downer Group

The builder of some of Australia’s largest solar plants will not take on any new sector contracts, amid claims that grid fallout and other factors have decimated the market opportunity.

On Wednesday, Downer Group announced it will withdraw from the large-scale solar segment, after financial results for the six months until December 2019 showed downturns with its construction business have triggered sizeable drops in profitability.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Grant Fenn, CEO of the Sydney-headquartered giant, linked Downer’s solar exit to its view that the “market has evaporated” in the past year. Sector operators, he said, are grappling with risk of major power loss factors and issues around connection, grid stability and equipment performance.

“These problems will no doubt be sorted out in time, but right now we don’t see a construction market in the short to medium term that will accept our terms and risk position on these matters. So we’re out,” Fenn said, adding however that already contracted PV projects will be delivered.

The group styles itself as one of the “largest and most experienced” EPCs in Australian renewables, with 2.3GW under its belt. Its solar work to date includes the country’s reportedly largest plant – 349MW Limondale – Numurkah (128MWp), Beryl (110.9MW) and Clare (100MW).

CEO Fenn described Downer’s solar exit as “disappointing but inevitable.” It won’t, he argued, majorly impact its work-in-hand plans and future pipeline. “The reality is when we look at markets, particularly solar as I’ve stated, the market isn’t there in the short to medium term,” he said.

The double whammy of funding shortages and grid chaos

What would it take for Downer to reconsider its retreat from solar construction work? Quizzed by PV Tech on this point, the Sydney-headquartered giant had not provided an answer by the time this article was published.

For the time being, however, the signs from the market suggest Australian renewables will continue to face challenges in the short term. Sector associations have piled warnings over a “dramatic” slide of green energy investment and the lack of a policy incentive after the LRET target was met in 2019.

With investor confidence sinking to 18-month lows, grid troubles remain among the most oft-cited concerns. The industry has so far failed in its campaign to have network operators reform the so-called marginal loss factor rules, which operators complain can majorly cripple project revenues.

In Australia, fallout from market design mixes with extreme weather crises, including the bushfires that engulfed vast areas of the southeast earlier this season. Combined with lightning and dust storms, the blazes create “unique challenges” for O&M specialists, it was recently said.

Despite the market upheaval, Australia continues to be targeted by developers looking for a home for major hybrid renewable ventures, as well as oil majors such as Shell. The steady growth of renewable capacity helped push power prices to three-year lows last year, official stats show.

The 2020 predictions by some analysts paint a bright picture for all solar segments this year. In January, consultancy Rystad Energy said a record 3.6GWac of large-scale PV and wind could be commissioned this year, while SunWiz is optimistic of small-scale prospects after a solid 2019.

See here to hear CEO Fenn's words in full and here to browse Downer's latest financial update

Read Next

July 1, 2025
A five-year research initiative is underway in Australia to test the viability of floating solar systems on irrigation dams.
June 30, 2025
Australian module manufacturer Tindo Solar has secured a 30MW solar module supply agreement to power Australia's first "net zero pipeline”.
June 26, 2025
PV solar cell manufacturer Halocell Energy has launched its first perovskite-based product called the Halocell Ambient Modules.
June 25, 2025
JinkoSolar has submitted a 133.76MWc solar-plus-storage project in New South Wales to the federal government under the EPBC Act.
June 25, 2025
Australia’s National Electricity Market (NEM) achieved a new record high for solar PV and wind generation at 12,463MW.
June 25, 2025
The New South Wales government has earmarked AU$2.1 billion (US$1.36 billion) for transmission infrastructure to connect its Renewable Energy Zones (REZ) and support utility-scale renewable and energy storage projects.

Subscribe to Newsletter

Upcoming Events

Media Partners, Solar Media Events
July 2, 2025
Bangkok, Thailand
Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico
Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 22, 2025
Bilbao, Spain
Solar Media Events
September 30, 2025
Seattle, USA