It is a delicious irony that the government’s review of the RET is generating exactly the kinds of regime uncertainty for renewable energy that that industry had hoped to impose on fossil fuels.
Miles George is the managing director of wind power firm Infigen Energy, and chairman of industry body the Clean Energy Council, and says changes to the RET would mean the death of the renewable energy industry.
“If the review decides that legislation would be scrapped, which I think is an unlikely outcome, but if it did, that would mean the end of the renewable energy industry in Australia,” Mr George told the ABC in an interview.
“Certainly the large scale industry would cease to exist, and the small scale industry would have devastating consequences for it if the small scale scheme was scrapped.”
Mr George says 24,000 jobs are at stake – almost as many jobs as in the oil and gas industry.
“If the target is scrapped then of course, all of those jobs would immediately be at risk,” he said.
Mr George says the review of the scheme was creating investor uncertainty and is deterring investment in emissions reduction projects.
“The level of investment in our industry in the last six months has been less than when the legislation first came into effect,” he observed.
“So it is already having a devastating effect on our industry. The industry has ground to a stop.”
I missed this AFR report from earlier in the month:
[Nathan Fabian - CEO of the Investor Group on Climate Change] warns any cut to the RET would result in lower revenue for exiting assets, greater difficulty in servicing debt, lower or no distributions to investors and “negative movements in periodic asset valuations, directly flowing through to investment and retirement account balances’’.
I hope that any portfolio managers who lose money having invested in these “investments” get sued. The only basis for any return was in the existence of government fiat and compulsory purchase in artificial markets. They needed to have been a bit more hard-headed in their analysis up front. An entire industry that can only survive on government subsidy can never be a viable investment.