A group of major local and international investors has warned their existing renewable energy projects may suffer ‘financial distress and the potential for financial failure’ if significant changes are made to the national Renewable Energy Target (RET) as a result of the current review of the policy.
The warning, from 17 leading companies who are senior members of the Clean Energy Council, came in an open letter to federal MPs, state Energy Ministers and cross-bench senators. The letter was sent to coincide with the opening of the renewable energy industry’s national Clean Energy Week conference in Sydney today.
It follows figures from Bloomberg New Energy Finance released last week that show the Australian clean energy sector has just had its worst six-month investment stretch since 2001 – a result of the political uncertainty resulting from the review of the Renewable Energy Target.
The open letter includes signatories from major international investors such as GE, Acciona, First Solar and Infigen Energy, as well as local companies Hydro Tasmania and Pacific Hydro.
The companies say they represent an industry that “has now committed over $10 billion worth of investment in large-scale renewable energy”.
“A significant reduction to the scheme would damage Australia’s reputation as a safe place to invest not only in clean energy, but in all forms of infrastructure,” the letter says.
“Changing the Renewable Energy Target...sends a negative signal to international investors who are scanning the globe for safe countries in which to invest in infrastructure – countries that have resisted ongoing policy change and have avoided damaging investor value.”
The Renewable Energy Target was originally introduced by the Howard Government in 2001, was expanded by the Rudd Government in 2009 and is scheduled to run until 2030.
“At every stage, the scheme and the passage of relevant legislation through Parliament has enjoyed strong support from both of the major political parties – making this investment-grade policy,” according to the letter.
“Analysis from energy market experts ROAM Consulting has shown that if the target is left to operate as legislated, we can expect another $14.5 billion to be invested in large-scale renewable energy infrastructure in Australia by 2020.”
But because of the way the policy works, significantly reducing the target would not only deter new investment, it would reduce the value of existing investments as well.
Clean Energy Council Acting Chief Executive Kane Thornton said the renewable energy industry could bring substantial benefits to Australia’s economy, but billions of dollars’ worth of projects were on hold due to the political uncertainty surrounding the ongoing review of the Renewable Energy Target.
“More than 140 countries have some form of renewable energy target, and the trend is to strengthen them, not weaken them,” he said.
“This group of major investors is simply seeking stability that will enable them to resume doing business in Australia with confidence.”
Clean Energy Week 2014 is proudly sponsored by Trina Solar and NAB. Held across two venues in Sydney, Clean Energy Week incorporates ATRAA (Australia's largest solar event), a huge trade show, a Policy and Finance Conference, and a professional development day for solar installers.
The program includes prominent local and international experts, politicians, financiers and business leaders. The event runs from 22-25 July 2014.
Please contact Clean Energy Council Media Manager Mark Bretherton on 0413 556 981 for more information or to arrange an interview.