Two of the biggest renewable energy developers in the world are reconsidering their commitment to Australia, signaling that changes to the renewable energy target will signal that Australia is closed for business for clan energy investments.
First Solar, which is currently building Australia’s largest solar farm, and Acciona, which has a string of wind farm projects, have both said they will reconsider their investmnt in Australia if the RET is changed.
The comments come as new analysis suggests that the deployment of renewables could fall by half if the RET is adjusted to a “real” 20 per cent target, although some within the Abbott government want the RET abolished altogether.
The report from Reputex suggests that the large scale component of the RET could be slashed from 41,000GWh to 24,600 GWh – a reduction of 40 per cent. It says this will likely cause a boost for black coal fired generation, which could increase by 9 per cent or 13GWh.
The comments by First Solar and Acciona suggest that Australia could see an exodus of clean energy investment that is even more significant than a decade ago, when the then and current energy minister Ian Macfarlane brought the renewable energy target to a standstill, despite commissioning a report that recommended the target be expanded.
The industry is fearful of what the Abbott government might do to renewables because it has appointed a climate change skeptic Dick Warburton to head a new review, and he will be helped by a fossil fuel lobbyist.
The Abbott government is also seeking to repeal the carbon price, dismantle the Clean Energy Finance Corporation, strip funds from the Australian Renewable Energy Agency, and close the Climate Change Authority, which strongly advises against the other actions.
First Solar, which is building a $450 million plant spread between Broken Hill and Nyngan, says the outlook is bleak over the next five years.
“We really need to look at what does the next five years look like from a broader policy backdrop perspective and what comes after these projects and whether the investment should continue to be made,” Jack Curtis, the company’s head of business development in Australia, told the ABC.
Meanwhile, Acciona said the Abbott government risks chasing foreign investors out of the country if it bows to the interests of coal-fired generators and waters down the renewable energy target.
Andrew Thompson, the managing director of Acciona’s Australian operations, told the AFR: “My view is to make drastic changes to the target now would be incredibly short-sighted … from the point of view of an investor we are now in an environment where the problem of sovereign risk is very real.”