Uncertainty surrounding the fate of the Renewable Energy Target has cast a heavy shadow over levels of investment in clean power projects.
Investment in large-scale clean power projects in Australia plunged last year following the election of the Abbot government and flagging support for climate change-related energy policies.
According to the latest data from Bloomberg New Energy Finance (BNEF) Australia’s global ranking for large-scale renewable energy investment fell a staggering 28 spots in the wake of the Coalition’s election, from 11th place in 2013 to 39th place in 2014, putting it behind a slew of developing economies including Sri Lanka, Honduras, Costa Rica and Myanmar.
Resource rich nations similar to Australia such as Canada and South Africa invested as much as 20 times more in large-scale renewable energy projects over the year.
Australian investments in large-scale renewable energy projects fell 88 per cent year-on-year, from nearly $2 billion in 2013 to $240 million in 2014.
This is the lowest figure for large-scale renewable energy investment in over a decade, with the last time the sector posted a lesser amount all the way back in 2002.
Expansion of large-scale wind power projects stalled completely last year, with zero investment in new undertakings.
Solar power comprised six out of the seven of the largest projects, all of which enjoyed state support in the form of either government grants or funding from the Clean Energy Finance Corp.
While Australia continues to invest copious amounts in small-scale renewable energy projects, whose inclusion in the total investment amount lifts the figure from $240 million to $4.6 billion last year, even this represents a 35 per cent fall compared to the year previously.
The plunge in investment levels follows a report released by the Climate Council in November last year indicating that investment in renewable energy projects had dropped 70 per cent, changing Australia from “a leader to a laggard” when it came to clean power.
Andrew Bray, national co-ordinator of the Australian Wind Association, imputed the sudden halt in the development of new large-scale wind projects to the government’s withdrawal of support for the Renewable Energy Target (RET).
“The government-sponsored review has caused the uncertainty that simply means that financiers won’t get behind new wind farms,” said Bray. “Without policy we certainly won’t see Australia embrace these important technologies.”
The Abbot government originally intended to reduce RET from its current figure of 41 terawatt-hours per annum by 2020 to 27 terawatt-hours, a move which was eventually thwarted in the Senate.
Kane Thornton, Chief Executive of the Clean Energy Council, echoed Bray’s remarks, pointing out that policy uncertainty over renewable energy was acting as a deterrent for investors from abroad.
“This is spooking international investors who were attracted to Australia because of our world class wind, solar hydro and bioenergy resources, and a strong renewable energy policy which had enjoyed bipartisan support for the past decade – including the lead-up to the last Federal Election,” said Thornton.
Shadow Environment Minister Anthony Albanese said doubts over the fate of RET have already deprived the industry of billions of dollars as well as Australian workers of thousands of jobs.
“Tony Abbot has cost this industry $2.5 billion and has robbed Australian businesses of their share of international investment which is going offshore,” said Albanese in a statement.
Albanese called for the Federal government to reaffirm its support for RET in order to bolster the now ailing prospects of the country’s renewable energy sector.
The Federal government continues to defend its policy stance, however, with a spokesperson for Minister for Industry and Science Ian MacFarlane, claiming that uncertainty surrounding the renewable energy sector is not the result of proposed amendments to RET.
“Uncertainty has existed for a number of years and many in the renewable sector privately acknowledge that the current target is neither sustainable nor achievable,” said the spokesperson.
“A recalibrated RET will better reflect market realities, which will in turn create a more stable environment for long-term investments.”