Australia's renewable energy sector took a hit when plans for the country's biggest solar power stations were scrapped due to climate change doubts. The $75 million fund for the 100-megawatt Mildura solar power station has been suspended amid uncertainties that Australia's renewable energy target will either be reduced or totally abandoned.
On August 18, Prime Minister Tony Abbott expressed his support for the closure of the new entrants' renewable energy target. According to reports, Silex Systems, the company behind the Mildura solar power station, said the scrapping of the project would only result in funds being withdrawn. The company feared that the Australian Renewable Energy Agency and the Victorian government will take the money back.
Silex Systems blamed the cancellation of the solar power station to the low wholesale prices of electricity and doubts over the renewable energy target. The project would have provided an alternative source of power to 40,000 homes.
The country's renewable energy target requires power to come from 20 per cent of clean energy sources like solar and wind power by 2020. The government is expected to lower the target. Mr Abbott has previously blamed the current target for increasing electricity prices.
According to research data released by advocates of renewable energy, electricity prices will increase if the renewable energy target is abandoned. Their report has estimated that coal and gas companies will only profit from the decision. Scrapping the renewable energy target can also lead to an increase in carbon emissions.
Dick Warburton, a former board member of the Reserve Bank of Australia has expressed doubts about "man-made" climate change. He was assigned by the government to review the country's clean energy goals. Mr Abbott has asked Warburton to consider scrapping Australia's renewable energy targets as indicated in a report by the Australian Financial Review.
Meanwhile, renewable energy companies have warned the scrapping of renewable energy targets could be "fatal" to the industry. Energy company Infigen's share price has declined as investors assess the uncertainties in the country's energy policies.