Fears energy investors will turn offshore

Rebecca Gredley
(Australian Associated Press)


Investors will turn offshore if Australia doesn’t implement a long-term energy policy or extend the target for renewables, the clean energy sector fears.

Although the Clean Energy Council was on Wednesday celebrating Australia being on track to achieve next year’s renewable energy target, the group is concerned that the goal won’t be extended.

Under the target, 33,000 gigawatt-hours – or 23.5 per cent – of Australia’s electricity will come from renewable sources by 2020.

“I don’t think we can take it for granted that investors will continue to build these projects, given the level of uncertainty in energy policy in this country and the range of challenges they face,” Clean Energy Council chief Kane Thornton said.

Australia needs a long-term, bipartisan energy policy to give investors the certainty they need to put money towards projects casting over decades, he says.

But Mr Thornton says the federal Energy Minister Angus Taylor hasn’t engaged with the sector to create such a policy, nor flagged the return of the coalition’s dumped National Energy Guarantee.

The renewable energy target was slashed in 2015 under the Abbott government from 41,000 gigawatt hours, with the support of Mr Taylor, who says it was too high.

“Those targets won’t be increased, and the reason is very simple, it’s because the economics of this is working fine now,” the minister told ABC Radio.

Mr Taylor says the boost in renewable energy has created a new challenge for the electricity system, fearing summer blackouts if there’s not enough baseload power.

He says expanding the Snowy Hydro scheme, developing a second interconnector between Tasmania and the mainland, and the Apple Isle’s “Battery of the Nation” vision are all high priorities.

Mr Taylor admits there is “no question” the cost of energy from wind and solar are low, arguing this proves there’s no longer a need for a renewable energy target.

Prime Minister Scott Morrison has echoed his minister.

“It (renewable energy) makes economic sense all on its own, it doesn’t need the government to hold its hand anymore,” he told reporters in Melbourne.

But Erwin Jackson from the Investor Group on Climate Change – which represents investors with more than $2 trillion of funds – says they are likely to look offshore.

“In the absence of a national plan to manage the transition to net zero emissions, then investors will continue to consider investments in the electricity sector as relatively high risk,” he told AAP.

Meanwhile, the Morrison government is yet to announce what projects will receive taxpayer support through its underwriting of investments in power generation.

A shortlist of 12 projects was announced ahead of the federal election in May, which the coalition was expected to lose.

Mr Taylor says some projects will cost billions of dollars, and a final announcement has not been made, as he wants to ensure taxpayer money is well spent.

Labor went to the federal election with a 50 per cent renewable energy target by 2030, which is now being reviewed.


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