Australia - no longer a safe place to invest?

Every change to the RET, every pause to review the policy mechanism, damages investor confidence. If the goalposts keep moving on business, we will move on to more stable environments.

When I last visited Australia, less than two years ago, the Renewable Energy Target was being reviewed and investment in new clean energy projects had stalled. 

After that review I was confident that the policy was settled, and that Australia would become a global leader in clean energy with its incredible bounty of sun, wind and a highly educated and skilled workforce. 

However, for the fifth time in a decade, the target has been reviewed again, stalling billions of dollars in clean energy investment. Worse still, unlike every previous review that has recommended the target be increased or maintained, this review recommends that the RET be closed to new projects. If the government adopts this recommendation, the renewable energy industry in Australia would be ruined.

With operations in over a dozen countries, we know that investment in renewable projects flows to where there is a clear vision for a clean energy future backed up by effective long-term policies. 

Germany has a mix of coal, nuclear and lignite power sources, but has locked in to 100 per cent renewables by 2050 with the support of every major party. This clear, unambiguous target is making it easier for the energy market to manage the transition to a power system underpinned by wind and solar.

Transforming the way we supply energy is not without its challenges. Even though we know that action needs to be taken on energy – business as usual dominates. Change is hard – there will always be resistance – and that is where strong leadership is essential. 

Every change to the RET, every pause to review the policy mechanism, damages investor confidence. If the goalposts keep moving on business, global investors move on to more stable environments. This will be at the peril of a cleaner economy and environment for Australia. 

Rather than investing in the clean energy technologies of the future, Australia now risks locking in the carbon polluting technologies of the past. 

And once the trust has gone, once the knowledge has gone, once the jobs have gone, then restarting the clean energy industry takes a lot of effort. 

What it boils down to is whether Australia wants to continue to rely on old and polluting coal-fired power stations or whether it wants to embrace today’s technologies and make renewables mainstream. 

If Australia fails to invest in clean energy, then it risks missing out on the job creation and new business opportunities that other countries are now seeing. 

To give you a glimpse of a clean energy future, wind power in Europe is getting closer to generating electricity at more competitive rates than coal and gas. We are seeing large companies integrating renewables into their traditional generation business with long-term plans to transition to a cleaner energy mix. In Germany, we have a thriving renewable sector that employs over 100,000 people. Importantly, renewable energy generators are putting downward pressure on power prices because wind and solar farms have virtually no operating costs. 

This is the future that Australia risks missing out on. Reducing the RET will jeopardise current and future investments. And it will damage Australia’s international reputation as a safe place to invest. 

Andreas Nauen is global chief executive of Senvion SE, a wind turbine manufacturer.

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