Australian and international investors worth hundreds of billions of dollars have called on the Federal Government to recognise the importance of Australia’s Renewable Energy Target (RET) to the investments that they have made and highlighted the sovereign risk that would be created if the policy was changed.

Some of the largest investment firms in the world have provided submissions to the review of the Renewable Energy Target, expressing their support for the RET. These firms make investments right around the world across many sectors of the economy and are very sensitive to sovereign risk - as would occur if the RET was to be reduced.

Clean Energy Council Acting Chief Executive Kane Thornton said these investors were clearly concerned about the risk of government moving the goal posts after an investment had been made in good faith, based on a scheme which has had long-standing bipartisan support and was explicitly legislated.

"If the RET was slashed, clearly the investments already made would be damaged and these investors would think twice about investing again in Australia, particularly given the appetite for renewable energy investment in other countries," he said. 

"More than 99 per cent of the 24,000 submissions to the review of the policy called for it to be maintained or increased.

"Investors, the public and the industry want to see the target left alone to do its job and get on with delivering some $15 billion in investment and tens of thousands of jobs across the country – as well as ensuring that the Prime Minister's promise that Australia is again open for business is matched by his actions."

Investors that have provided submissions to the Renewable Energy Target review include ADK Capital from the United States, Norway's DNB Asset Management, Italy’s Kairos Investment Management, Environmental Investment Services Asia Limited, and IFM Investors and Intelligent Investor Funds Pty Ltd from Australia.

Christian Rom, Portfolio Manager of DNB Asset Management wrote: "Our experience from following renewable regulation and implementation around the globe is that stability in regulation is the single most important factor to secure greatest cost efficiency for renewable investments."

Nat Klipper, Portfolio Manager of New York-based ADK Capital wrote in the company’s submission: "From our global investing perspective it would appear to us that Australia's existing targets are broadly consistent with peer nations with respect to reducing carbon emissions of the electricity generation sector."

Kyle Mangini, Global Head of Infrastructure at IFM Investors wrote: "One of the key drivers in creating the RET scheme was to provide the investment certainty necessary for the private sector to build and operate renewable generation assets via a fixed generation target. On this basis, IFM Investors has invested over $300 million under the scheme. We do not see any compelling reason to modify the scheme – in fact changing it will undermine investor confidence."

Jeremy Higgs, Environmental Services Asia Limited, Hong Kong stated: "By having this review the government has already established serious sovereign risk for international investors such as ourselves."

Federico Ghella, Leo Fund, London stated: "It is, therefore, concerning to us as investors that these schemes are being reviewed and some of the targets can undergo a considerable downward revision. We truly believe that such changes, if finally adopted, will have a significant negative effect on investor sentiment regarding the renewable sector specifically and in maintaining Australia as a favoured destination of investment."

Please contact Clean Energy Council Media Manager Mark Bretherton on 0413 556 981 for more information or to arrange an interview.