Australia's large-scale renewable investment dives in 2014
Ill-winds blowing through Australia's renewable energy industry. Photo: Bloomberg
Australia's ranking among investors in large-scale renewable energy plummeted in 2014, dropping behind much poorer nations such as Panama, Sri Lanka and Myanmar, as confidence in the Abbott government's policies for the sector evaporated, according to Bloomberg New Energy Finance.
Investments in large-scale wind, solar and other clean energy sources dived 88 per cent in 2014 to $240 million, the lowest level since 2002, the energy consultancy said.
Australia's global ranking sank 28 places from 11th with almost $2 billion invested in 2013 to just 39th last year.
Small-scale solar held its own even as large-scale investments dived. Photo: Jeffrey Chan
"We recorded zero investment in the wind sector," said Kobad Bhavnagri, lead analyst for BNEF in Sydney. Six of the seven largest projects were in solar power and involved support from government grants or the Clean Energy Finance Corp.
A breakdown in bipartisan support for the Renewable Energy Target was central to investment all but halting, Mr Bhavnagri said.
The Abbott government has sought to cut the target from the current goal of 41 terawatt-hours annually by 2020 to 27 terawatt-hours but has been blocked by Labor, the Greens and the Palmer United Party in the Senate.
Such a move would slash the value of renewable energy certificates, harming the viability of existing wind farms, not only new ventures, companies such as Infigen Energy have said.
Industry Minister Ian Macfarlane sought to play down the impact of uncertainty, telling "The" "A""ustralian Financial Review"that "the real reason wind farms aren't proceeding is they can't get an off-take agreement", the paper reported on Monday.
Australia's overall investment in clean energy was $4.6 billion in 2014 when small-scale investments such as roof-top solar PV were taken into account, according to BNEF figures reported on Friday by Fairfax Media.
That tally was 35 per cent lower than a year earlier
– and may be cut further when government reductions in research and development investment are revealed. It came as the rest of the world lifted clean energy investment 12 per cent in 2014 to a record $US310 billion ($383 billion), BNEF said.
*'Out on strike'*
Labor's policy is to reopen talks with the government but it "will not support any proposal that decimates the industry", a spokeswoman for Mark Butler, shadow environment minister, told Fairfax Media.
"Tony Abbott's goal is to protect the profits of old polluting industries like coal," said the Greens environment spokeswoman, Senator Larissa Waters. "Any so-called compromise deal will be an attack on the RET and clean energy in Australia."
Environment minister Greg Hunt said Labor was to blame for the uncertainty "by refusing to have meaningful discussions" on the future of the RET.
"The government wants to ensure renewables play an increasing role in Australia's future energy mix and we will continue to seek Labor's support to ensure the sector is sustainable, but to date they've been out on strike." Mr Hunt said.
BNEF's Mr Bhavnagri said the uncertainty in the industry made it difficult to predict whether investment would improve in 2015.
"It depends entirely on what happens politically," he said. "It's impossible to read."
The damage, though, was not just confined to renewable energy but all large energy investments. "There was a tangible impact on the cost of debt and equity," he said, adding such effects would "persist for a while".
*Emissions shift*
Hugh Saddler, principal consultant for Pitt & Sherry, said the debate over renewable energy largely omitted Australia's need to shift to a low-emissions economy as nations move to avoid dangerous climate change.
"The arguments are framed in terms of the cost of generation today, in which new-build renewable generators are compared with long ago depreciated legacy coal-fired generators," Dr Saddler said.
"Australia is almost unique in the world in combining an extremely emissions-intensive electricity generation industry with a negligible commitment to transforming the industry towards a low-emission future," he said.
The only developed nations with a similar energy mix, Poland and Estonia, had none of the abundant wind, solar, wave and other renewable energy available to Australia, Dr Saddler said.
In BNEF's ranking, Poland was ranked 18th last year for large renewable investments, while Estonia was one of a number of countries registering zero such investments. Others included Iran, Singapore, Zimbabwe, Cuba and New Zealand.
