Uncertainty about Australia’s Renewable Energy Target (RET) is causing the company building the southern hemisphere’s largest solar plant to reconsider future investment.
Multinational solar panel maker First Solar is building a $450 million plant in the far west of New South Wales for energy provider AGL.
It would be enough to power 50,000 homes, the company said.
First Solar’s vice-president of business development, Jack Curtis, told ABC News a lot had changed in the eight months since the former Labor government announced the project.
“Those project reached financial close in a different political and business environment which was almost a year ago now,” Mr Curtis said.
“That’s obviously changed quite dramatically since the election. There’s now a much greater deal of uncertainty around future projects like this,” he added.
Mr Curtis says this is partly due to the conservative Liberal-National government’s review of the RET, which currently aims to have 20 per cent of Australia’s electricity generated by clean energy sources by 2020.
Former Reserve Bank board member Dick Warburton, a self-confessed man-made global warming sceptic, is heading the review.
The target was due to be reviewed this year, and the investigation is specifically looking at the impact the RET is having on home and industry power bills.
The ABC’s Fact Check unit found the cost of the RET was estimated to be between one and five per cent of power bills.
Australian Chamber of Commerce acting chief economist Burchell Wilson said it was a failed policy that should be phased out.
“It’s five per cent now, and there’s a real question as to how much it will be in 2020,” he told ABC News.
“This thing is set to double in terms of the amount of renewable energy they’re forcing on consumers.”
Mr Curtis says for First Solar, 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,” he said.
Meanwhile Spanish wind developer Acciona has said foreign funds for Australian renewable projects are on the line with the government’s RET review, The Australian Financial Review newspaper reports.
According to The AFR, Acciona managing director Andrew Thomson said “to make drastic changes to the target now would be incredibly short-sighted”.
He said the company’s Spanish headquarters was “watching quite closely and they are very concerned to see that we end up with a sensible outcome”.
“From the point of view of an investor, we are now in an environment where the problem of sovereign risk is very real,” Mr Thomson told The AFR.
Mr Thomson said the company had about $75 million worth of projects in the “advanced” state of development, mostly awaiting power purchase agreements, the newspaper reports.
