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Green energy target delay hits multimillion-dollar projects

Projects set to generate hundreds of jobs and millions of investment dollars for South Australia are at risk or on hold because of uncertainty over a national target to increase renewable energy generation.

The Federal Government is reviewing the Renewable Energy Target, which aims for 20 per cent of Australian energy produced from sources such as wind, solar or geothermal by 2020.

The target provides an incentive to start or expand renewable energy projects but the review – expected to be complete by the middle of the year – is causing companies to reconsider their plans.

It is understood a number have raised concerns with the State Labor Government, which has built a reputation as a renewable energy leader.

In a letter to Premier Jay Weatherill clean power firm Pacific Hydro says it has $550 million in South Australian projects “ready to go if the current renewable energy target is retained”.

“These projects could provide hundreds of jobs in construction and deliver around $260,000 annually through community fund grants,” the letter says.

“While the RET review uncertainty continues these projects will remain on the shelf, depriving the state of potential jobs and investment”.

Pacific Hydro has approval to build a 42-turbine, $240 million project near Keyneton in the eastern Mount Lofty Ranges.

It is expected to power the equivalent of 68,000 homes a year and create 500 construction jobs.

However the company’s executive manager of external affairs, Andrew Richards, said it would be difficult to secure funding for the project or a power purchase agreement with a major retailer while the review was underway.

“Everyone around the country who is interested in building energy projects … is waiting on the outcome of the review,” he said.

“Its not a good environment to be planning new projects or planning to invest.”

Energy Minister Tom Koutsantonis has written to the Renewable Energy Target review panel, arguing against abolishing the target but conceding some changes might be necessary, such as extending the 2020 timeline and cutting compliance costs and red tape.

Mr Koutsantonis also argued the scheme should not be reviewed more than once every four years.

He said the target had underpinned $5.5 billion in capital expenditure in SA and was forecast to support a further $4.5 billion by 2025.

Mr Koutsantonis said “certainty … is essential” to continued growth in renewable energy investment.

“Many generators have made, or are in the process of making, investment decisions based on the current (target),” he wrote.

“Large-scale renewable generation investment decisions may be affected if the target is periodically changed as investors would factor this risk into financing decisions.”