Industry uncertainty puts renewable energy projects at risk
A green energy developer says uncertainty over the future of the renewable energy target is putting Australia’s whole renewable energy sector at risk. The RET is being reviewed by the Federal Government, but Pacific Hydro says as a result, it’s been forced to shelve millions of dollars worth of investment across Australia.
ELEANOR HALL: Green energy developer, Pacific Hydro, says it has shelved millions of dollars worth of investment across Australia because of uncertainty over the future of the renewable energy target.
The RET is designed to ensure that 20 per cent of the nation’s electricity comes from renewable sources by 2020. It’s being reviewed by the Federal Government.
But Pacific Hydro says the review is taking too long and is putting Australia’s renewable energy sector at risk.
Sallese Gibson reports.
SALLESE GIBSON: Pacific Hydro received planning approval late last year to build a 42-turbine wind farm at Keyneton an hour and a half north-west of Adelaide.
Executive manager, Andrew Richards, says it’s a significant investment in the region.
ANDREW RICHARDS: It’ll be about a $240 million project, of which many millions-of-dollars will go into the regional community by way of construction jobs, operation and maintenance jobs, landholder leases and also our sustainable community fund.
SALLESE GIBSON: But Pacific Hydro has put the project on hold, along with seven other wind, solar and geothermal projects across the country.
And Mr Richards says his company isn’t alone.
ANDREW RICHARDS: There’s not a lot of investment appetite to look at new projects because there’s a substantial review of the renewable energy target underway as we speak.
So no one can really invest in that kind of climate, no one wants to write contracts for revenue for the energy produced by the renewable energy projects, no banks want to look at financing at the moment because of the regulatory uncertainty.
SALLESE GIBSON: South Australia’s Premier Jay Weatherill agrees.
He says it had anticipated $4.5 billion worth of investment in clean energy projects in South Australia by 2025, but that may no longer be the case.
JAY WEATHERILL: If you actually have companies that are making investments that have returns calculated over decades and decades and you’re talking about pulling the rug out from out underneath them, that obviously means that companies get very concerned about investing, not only in the renewable energy sector but in any part of the economy because they’re worried about the sovereign risk associated with investing in a country that’s prepared to change its rules and regulations underneath business.
SALLESE GIBSON: So what would you like to see the Federal Government do from this point forwards?
JAY WEATHERILL: We want them to have a clear commitment to renewable energy in Australia so that these investments that are in the pipeline can go ahead.
SALLESE GIBSON: The Federal Government launched a review of the target in February, to look at its impact on electricity prices and energy markets, the manufacturing sector and Australian households.
But Victoria McKenzie-McHarg from the Australian Conservation Council says the review unnecessary.
VICTORIA MCKENZIE-MCHARG: We have a renewable energy target that is working. And it works properly when it’s not knee-capped by uncertainty in the sector. We need the Government to recommit to the renewable energy target as it is, and then commit to a much stronger target in future for 2030 and for 2040.
SALLESE GIBSON: She says investment in the clean energy sector has dropped to its lowest level in over a decade.
VICTORIA MCKENZIE-MCHARG: This review has unleashed uncertainty in the clean energy sector in Australia. We’ve definitely seen a number of companies pull up stumps from planned investments in Australia – for example, in the last quarter, there’s only been about $40 million invested in large scale renewable energy in Australia, which is the lowest level since the first half of 2001.
SALLESE GIBSON: In a statement, the Federal Government says it has a legislative requirement to review the target this year.
It says it’s consulting with a broad range of stakeholders to ensure the scheme is working efficiently and effectively.
But Andrew Richards says the review is taking too long and putting Australia’s entire renewable energy sector at risk.
ANDREW RICHARDS: We need the renewable energy target legislation to be completed. We need the Government to make effectively no changes to it, we think it’s running pretty well at the moment.
There’s been a lot of talk about them reducing the target. If they reduce the target then projects like Keyneton will not go ahead.
If they reduce the target less solar panels will be put on roofs, there’ll be less innovation.
Eleanor Hall: That’s Andrew Richards from Pacific Hydro, ending Sallese Gibson’s report.