Backlash builds on energy goal

THE ­solar, wind and hydro-electricity industries have called for the government to reconsider plans to cut the renewable energy target.

AUSTRALIA’S ­ solar, wind and hydro-electricity industries have called for the government to reconsider plans to cut the renewable energy target and restore bipartisan support needed for companies to resume investment in new capacity.

Companies including renewable energy operator Pacific Hydro and Infigen, as well as wind-turbine suppliers GE and Senvion, said while the decision by Labor to walk away from talks with the government over a deal on the RET meant the existing target of 20 per cent ­renewable energy by 2020 was intact, the political split would leave investment on hold.

Lane Crockett, executive general manager at one of Australia’s biggest wind farm operators, ­Pacific Hydro, said the renewable energy industry was in “deep ­crisis’’ as a result of the review and proposed cuts to the RET. “With negotiations having failed, this lack of resolution between the parties will now only prolong the crisis, which has already resulted in the loss of hundreds of jobs, a major slump in renewable energy investment and significant industry upheaval.’’

The Clean Energy Council said the government’s plans to cut the target from the original 20 per cent of Australia’s electricity to a lower “real 20 per cent’’ threatened 21,000 jobs. “The federal government’s proposal to slash the RET is a clear broken promise that would result in a reduction of the future target by more than 60 per cent, decimating the renewable energy industry and risking the $10 billion worth of investment ­already made,” chief executive Kane Thornton said.

The original legislation for the scheme proposed 41,000 gigawatt hours of electricity, which amounted to 20 per cent of the then projected electricity supply by 2020. The government has proposed cutting to a “real 20 per cent’’, which would be about 27,000GWh, because electricity consumption has fallen as a result of the rapid take-up of rooftop solar schemes and more energy-efficient appliances, as well as the decline of the energy-intensive manufacturing industry.

Renewable energy companies said such a change amounted to a 60 per cent cut in the investment needed to reach the target by 2020, which would not be enough to sustain a viable industry.

Slated investment worth $15bn has stalled, with companies only spending to complete projects that were under way before the government announced the review early this year, such as the final stage of Pacific Hydro’s Portland project in Victoria.

The chief executive of renewable operator Infigen Energy, Miles George, said the government had failed to make a case for cutting the target and should reconsider its position. He said the plan to cut the target could expose the government to claims for compensation and raise issues of sovereign risk. “I don’t think it is tenable for the government to allow an industry to go into distress, risk job losses and threaten billions of dollars of existing investments as a result of an ad hoc review process,’’ Mr George said.

He said the impasse was a better outcome than ­accepting cuts to the scheme which would devastate the industry.

“If that is the only position that the government will accept, we would much rather an impasse than that outcome, which will de destructive for the industry,’’ he said.