Recurrent Energy, a leading US developer of solar power plants, is closing its Australian office because of the uncertainty over the renewable energy target.
Recurrent last week said it had 1,500MW of large scale solar PV projects in the pipeline in Australia, worth around $3 billion in potential investments, although it said it was only likely to be able to develop these if the renewable energy target was maintained.
However, the California-based company has since decided to cut its costs and close down the Australian office and will manage its Australian portfolio from the US. It may reopen the office once policy certainty is returned.
Recurrent is the first major international renewable energy developer to close its offices in Australia, but it may not be the last.
Numerous international developers have warned that they could quit Australia if the RET was removed or diluted, and say it is increasingly difficult to convince head offices in Europe, Asia and the US to dedicate time, effort and resources to the Australian market, particularly with other markets booming.
These include Spain’s Acciona and the US-based First Solar, who warned in April that they would reconsider their investments in Australia if the RET was diluted. Even Australian companies Infigen Energy and Pacific Hydro are spending more money on investments overseas than in their home market.
The decision by Recurrent Energy comes as the RET Review Panel appointed by Tony Abbott – comprising two climate sceptics and a fossil fuel lobbyist – is reportedly asking for more time to submit its report to the Prime Minister’s department.
The Australian Financial Review quoted panel chairman Dick Warburton as saying the panel was seeking an extension of several weeks to submit the report.
It is widely expected to recommend a significant cut in the RET, at least to what it may describe as a “true” 20 per cent target.
But the fact that any such recommendation will face opposition in the Senate means that policy uncertainty could continue for another few years, putting further delays on investment decisions. And it could force the review panel back to the drawing board, possibly to reconsider a 30 per cent by 2030 target, which some speculate may be the new compromise.
Colin Liebmann, the project development manager for Recurrent Energy in Australia, and who established the company’s Australian presence three years ago, sent an email to industry colleagues announcing that he would “wrap up” his work with Recurrent Energy shortly.
“We have had some good successes with our pipeline of utility-scale solar opportunities during that time ,considering the challenging policy environment,” he wrote.
“Recurrent is slowing down their investment in the Australian market pending the outcome of RET and will manage it from USA.
“When the policy signals strengthen, they will ramp up again. They will continue to develop RE Oakey, the 80MW opportunity in Queensland, and pursue all available funding strategies in the meantime.”
An application for the 80MW plant in the Darling Downs region has been submitted to the Toowoomba regional council. A decision is expected in the next few months.
Liebmann confirmed that he and a colleague were leaving Recurrent Energy.
“This is what was predicted,” he told RenewEconomy. “International companies move their resources around, into the markets that are active. That’s what happens.”
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