The Australian wind industry has gathered in Melbourne to confront an uncomfortable but unavoidable truth: The cost of wind turbines has almost doubled from just a few years ago, and the technology is now being beaten on price by the combined forces of solar and battery storage.

The Asia Pacific Wind Energy Summit was reminded on Wednesday that technology costs have soared as a result of cost inflation, the extra expense of developing more challenging sites, and the delays caused by planning bottlenecks and appeals.

In Australia, no wind project has reached financial close so far in 2025, and one leading industry executive suggested solar-battery hybrids are now creating an existential challenge to wind on cost grounds alone, let alone their speed of deployment and modular construction.

“PPAs (power purchase agreements) priced at $110-120 per megawatt hour (MWh) are pretty common in the transactions that we’re seeing,” Arup energy principal Patrick Gorr told Renew Economy on the sidelines of the conference.

“It reflects the fact that more optimal sites have been taken up and so what we’re seeing is offshore wind sizes, onshore. So (the 923 megawatt) McIntyre wind farm, for example.

“When you get into a mega project scale, it creates more cost. You do get cost and scale coming down, but these projects are bigger and they’re more difficult to get across the line with planning and they cost more to get through.”

In 2023, AGL chief executive Damien Nicks told investors PPA prices for both solar and wind projects had  jumped to $70/MWh from the $40-50/MWh they’d descended to in previous years.

Does anyone remember the low $50/MWh contracts signed for Stockyard Hill in Victoria, or the $44/MWh price (not indexed to inflation) written by the ACT Government for the Goyder South project in South Australia?

But even the new-normal pricing for PPAs, of more than $110/MWh, is only available if developers can lock in a deal.

Getting a PPA signed at any price is becoming harder, says University of Wollongong Energy Futures Network director Ty Christopher.

He says the cause is wholesale market volatility, as solar squashes prices during the day followed by the big three gentailers (the big utilities with combined generator and retailer businesses) using batteries to push up prices in the evening.

“A lot of what we’re seeing with the failure of wind projects to meet FiD (final investment decisions) is due to these wind projects not being attractive to the big three dominant gentailers, because new generation weakens their ability to manipulate wholesale markets,” he told Renew Economy.

“What wind projects need for FiD to happen is certainty, and we’re not seeing market reform happening fast enough.”

Where are the closed projects?

No wind projects  reached financial close in the first half of 2025, according to BNEF data. A small number of projects reaching FiD are hoped to come through in the coming months and single-digit gigawatts of wind to roll through in 2026.

Gorr puts the onus on Australia’s planning processes for holding up decisions, which he says are overstretched and underfunded.

But as government approval timelines for wind are still measured in years he is not surprised by the lack of progress this year.

“New South Wales, I think they’re averaging 47 months for development approvals at the moment for onshore wind. That’s an insane amount of time. Victoria’s not that much (on average 15 months). Queensland, obviously, there’s now sovereign risk for developers,” he says.

The federal environmental process, which new minister Murray Watt is promising to reform within the next 18 months,  is even worse: 27 renewable energy projects were deemed EPBC controlled actions in 2023 and 49 in 2024, but none had been approved by early August.

During an industry panel at the conference on Wednesday, Gorr said Victoria has 24 wind projects in the planning pipeline equating to some 12 gigawatts (GW) of power.

“We don’t need more projects [in the pipeline]. We need more projects to leave it,” he said.

In August, Victoria awarded its  first environmental approval for a wind project in three years to the 400 megawatt (MW) Mt Fyans development, which had been tied up in planning processes for nearly a decade.

It’s still waiting on federal EPBC approvals, however.

Existential dilemma

The cost and time needed to build wind projects now means developers who were once focused on wind are choosing solar-battery hybrid projects instead.

It’s a problem that is deeply worrying Peter Cowling, the new Australian lead for Chinese OEM Envision, and former country head of Danish wind turbine giant Vestas, and a former chair of the Clean Energy Council.

“Infrastructure is expensive here. I think wind is under an existential challenge from batteries plus solar,” he told an industry forum on Wednesday.

“The further north you go, and wind declines, and the complexity of cost of construction increases, the harder that gets. So we really need to be helping wind as best we can.”

He says that means being transparent about the options for different states.

“Victoria is the place where it’s most likely to be successful because the wind is best, the sun is the least. But I find the debate at the moment in Victoria really quite frustrating. We’ve just had a huge focus on offshore, which we all know is a significant, expensive solution. We’ve not had a transparent discussion about the options,” he says.

“We’ve just watched Project EnergyConnect (the new link from South Australia to NSW) be built to clearly the lowest-cost wind in the country, at about a 10th of the size it should have been.

“I’m deeply concerned with the lack of ambition of the Victorian transmission plan, because if offshore doesn’t happen, we don’t come up with huge subsidies, what are we going to do?”

See also:  Why solar battery hybrids are the new go-to technology for the green energy transition

Project EnergyConnect was  built undersized as a 330kV line rather than a full sized 500kV line. That decision was based on the Integrated System Plan which assumed the wind resource in the South West renewable energy zone, which it was supposed to open up, wasn’t very strong with a capacity factor of less than 30%.

As a result, the South West REZ was  limited to just four projects, three of which saw major cuts to how big they could be.

Republished from Renew Economy, 18 September

The views expressed in this article may or may not reflect those of Pearls and Irritations.