Renewable Energy Projects in Australia Shelved Until September Election Results
By Athena Yenko | May 27, 2013 3:01 PM EST
Future plans of further developing the Infigen renewable energy project in Canberra and other related projects has come in a standstill as Australia waits for September election results.
Inifgen Energy's Capital Wind Farm was a forerunner in the wind power industry that will supply Australia of cheap fossil-fuel. But as "old" politicians come to the end of their terms and "new" politicians sit in power in September the future of the renewable energy will then sit to obscurity.
The September 14 election runs a risk at Labor's $20 billion investment on pipeline that control greenhouse emissions.
Infigen, alone, is experiencing dilemma as it decides whether it push through its A$180 million expansion of the Capital wind farm - even though its local plans were already approved - or it will enter a joint venture solar plant with Suntech Power, the U.S. based company.
As much as the Conservatives promised to review the policy on renewable energy, it lacked actual and immediate plans to handle the issue on cheap fossil fuel.
Hunt said that he is "very much aware of the importance of providing certainty for the renewable energy sector" but he admits that these changes will "create sovereign risk."
Hunt revealed that A$10 Billion Clean Energy Finance Corporation planned to back out from its contractual obligation if the government elected on September 14 will effect drastic change to a pre-election agreement. The agreement entailed to assist in commercializing wind and solar developments.
Up until the September election results, report showed that there are banks which disapproved loan for renewable energy projects unless backed-up by contracts signed by energy retailers.
Lane Cockett, Pacific Hydro's Australian general manager, agreed that the political crisis gad greatly affected future plans to expand cheap fossil fuel development. "I'm sentiment unsure. I've never seen the crystal ball more hazy."
Meanwhile, the challenge in changing or developing renewable energy projects is on opposition leader Tony Abbott. The challenge is politically risky for Mr. Abbott not only because there is a multi-billion of dollars at risk but more importantly because the campaign for renewable energy is Conservative's "baby project."
It is to be recalled that in 2001, the conservative government introduced the world-first mandatory target for renewable energy. The decision followed scientific warnings of global warming and pressure from the public to act on the ten-year drought.
During Labor's seat in power in 2007, laws were passed requiring that 20 per cent of power will come from renewable energy come 2020. The said law stated that fixed Renewable Energy Target of 41,00 gigawatt hours from solar, geothermal and win. This was supported by certified certificates saying that to make renewable energy more usable than coal generators, the RET will be supported by 41 million tons of greenhouse produced from national emissions yearly.
But as Australia waits for the September 14 results, all planned remained hanging in the air.
Nathan Fabian, head of Australia's Investor Group on Climate Change, said that "We expect changes. We don't know what they'll be. But the uncertainty is having a crippling effect on the market. We don't see any clear long-term policy direction on the climate or energy sector from the opposition. And until that is clear, capital is sitting on the sidelines."
Mr. Fabian and Australia's Investor Group on Climate Change had investments with approximately $900 billion in funds - a great risk they fear if the industry suffers because of the change in political seats. The group's investments include pension funds and major international banks.
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