Clean energy investors' plea for certainty

An open letter from 17 renewables companies urges the government to keep the Renewable Energy Target, saying any weakening of the scheme risked financial distress and potentially failure, and could see sovereign risk expand beyond the sector.

*This open letter is penned by the Clean Energy Council on behalf of 17 renewable energy companies, all senior members of the CEC. The Renewable Energy Target review, chaired by businessman Dick Warburton, is set to report in the next two weeks.

We are writing as significant investors in Australia’s energy infrastructure, representing an industry which has now committed over $10 billion worth of investment in large-scale renewable energy. 

This investment has been driven by the legally binding Large-scale Renewable Energy Target (LRET), with a commitment to sourcing 41,000 gigawatt-hours of Australia’s electricity from large-scale renewable energy sources by 2020. 

Our companies have made their investments in renewable energy projects on the basis of the 41,000GWh target continuing to operate as legislated out to 2030. It is this fixed GWh target, rather than an ever-changing percentage based on a forecast, that has underpinned over $10 billion worth of investment to date.

The 41,000GWh target, as currently legislated, will deliver the revenue necessary to recover the investments we have made. If the 41,000GWh target is reduced, or moved out past 2020, existing wind farms, bagasse plants, hydropower and large-scale solar facilities will suffer financial distress and the potential for financial failure. 

For example, reducing the 41,000GWh target to 25,500GWh by 2020, as being proposed by some coal generators in line with a ‘real 20 per cent’ based on current energy forecasts, would result in a significant reduction in revenue for existing renewable energy projects. 

A significant reduction to the scheme would damage Australia’s reputation as a safe place to invest not only in clean energy, but in all forms of infrastructure. 

The original Renewable Energy Target policy was introduced by the Howard Coalition Government in 2001. It was expanded in 2009 and refined in 2010 to deliver 41,000GWh from large-scale sources by 2020, which, when combined with small-scale renewable energy would deliver at least 20 per cent renewable energy by the year 2020. At every stage, the scheme and the passage of relevant legislation through Parliament has enjoyed strong support from both of the major political parties – making this investment grade policy. 

Kind regards, 

Kane Thornton, acting chief executive, Clean Energy Council on behalf of:

Acciona, CWP, Energy Developments, First Solar, FRV, GE, Goldwind, Hydro Tasmania, Infigen, PacHydro, RAC, RES, Senvion, SMA, TrinaSolar, TrustPower, Vestas.

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