Solar industry sees first projects put on ice as nuclear proposal sows doubt among investors

by Admin
July 21, 2024

In short:

A solar construction business says its investors are getting worried about renewable policy turbulence, and it’s slowing down business.

One of their projects has been delayed indefinitely as its owners wait to see what happens politically.

What’s next?

The government wants the Coalition to map out its renewables policy to provide more surety for investors.

Political turbulence around the renewable energy debate is making some clean energy investors nervous.

Despite reassurances from the federal government, the opposition’s nuclear policy has sown some doubt over whether the renewable industry will continue to have Commonwealth policy support over the next several decades.

One Australian solar manufacturing business said it had already seen an impact.

Dr Methuen Morgan, head of solar farm installers Meralli Projects, said he had already seen an increase in hesitancy from investors.

“They’re concerned about which way a potential future government is going to go,” he told the ABC.

“It’s slowing the business down, projects that were meant to be going ahead are being slowed down and there’s a wait-and-see attitude being adopted by some.”

Meralli Projects head Methuen Morgan previously sought to establish a regional challenger to the Nationals at a NSW state election.

He said it had already resulted in one of their projects being put on hold indefinitely.

“There’s a project that’s up to be invested in, a small solar project, and they’re just literally wanting to see what the [parliament] does in this space.”

At the National Press Club on Wednesday, Energy Minister Chris Bowen echoed those concerns.

He revealed he had been approached by renewable energy investors questioning the long-term reliability of the industry.

“Has it been raised with me as a concern by renewable energy investors? Have they paid attention and are they worried about it? Yes,” he said.

Labor wants to increase the share of renewables in the electricity grid to 82 per cent by 2030 — which it needs to do to have any chance of meeting its emissions reduction promise.

Project delays are likely to put that timeline at risk, and the energy minister has blamed the Coalition for introducing doubt.

In a statement, a spokesperson for Climate Change and Energy Minister Chris Bowen said: “After 10 years of delay, denial and dysfunction under the former Coalition government, the Albanese government has secured investment confidence and certainty with the right policy settings to capitalise on the huge opportunities for Australia in the clean energy transformation.

“The Opposition’s anti-renewables nuclear plan is about stopping this progress.

“They would have years of discussions about nuclear, drafting laws and planning.

“There won’t be electricity generated under their own plans before 2035. Even that is unrealistic — based on what we’re seeing overseas, it would be 2040s at least.

“In the meantime, we miss this massive clean energy opportunity for our country.”

Investor group says money could go back overseas

The Coalition had not released their policy on renewables ahead of the next election, though they have said renewables outside of nuclear would still have some part to play in their plans for Australia’s energy mix.

Opposition Leader Peter Dutton and Shadow Energy Minister Ted O’Brien have criticised the government for focusing too heavily on renewables.

At last month’s Liberal National Conference, Mr Dutton said Labor’s “all-eggs-in-one-basket ‘renewables only’ approach” was a wrecking ball through the economy.

Erwin Jackson, policy director at the Investor Group on Climate Change, said he had also heard concerns from investors.

“The recent lack of bipartisanship on the least-cost pathway to net zero is causing investors to re-evaluate projects and also potentially put on hold new investment,” he said.

IGCC has more than 100 domestic and international investors including superannuation funds and advisory groups.

Mr Jackson said investors looking to put money into renewables had previously put their money overseas and could do so again instead of investing in Australia.

“Policy stability and clarity are critical for them to make investment decisions,” he said.

“But they also can invest globally and will invest in other jurisdictions with that policy clarity if there isn’t any in Australia.”

Dr Morgan said he wanted to see more stability and clearer targets to make it easier for investors.

“Who wants to invest $10 million or $12 million in a project that’s supposed to have a life of 30 years, and have the rules changed on them with a change of government? Why would you do that?”

Posted Yesterday at 7:17pmSun 21 Jul 2024 at 7:17pm, updated 20 hours agoMon 22 Jul 2024 at 2:39am