Long-frustrated wind and solar developers
in Australia can now get to work on more than A$14 billion ($11
billion) in projects after a new renewable energy target passed
parliament. Acciona SA, the Spanish clean-energy company, will start talks with
banks and retailers as it progresses with A$750 million in new wind
farms. SunEdison Inc., the U.S. solar company, said it will look at
developing large projects in Australia.
“Stability is what the industry has been crying out for,” Jeremy
Rich, managing director of SunEdison’s Australian unit, said in a phone
interview Wednesday. “Finally we’ve been able to achieve that.”
The legislation passed late Tuesday ends months of policy uncertainty that paralyzed investment
in renewable energy projects. Even though the target for large-scale
plants was scaled back, developers including Vestas Wind Systems A/S and
Senvion SE said having a new policy will pave the way for further
spending.
Australia has already seen a solar boom in the residential sector,
with about 1.4 million homes putting panels on their roofs since 2001,
the most in the world as a proportion of total households, according to
the Grattan Institute. The resolution on the renewable energy target is
expected to spur significant investment in big solar plants as well.
Financing Hurdles
Solar is forecast to account for almost half of the new large-scale
capacity that starts in Australia by 2021, according to Bloomberg New
Energy Finance. First Solar Inc., a U.S. solar panel producer, can move ahead with
plans for two or three projects in Australia that depended on a
bipartisan deal, according to Jack Curtis, the company’s Asia-Pacific
manager.
Origin Energy Ltd., an Australian electricity and gas retailer, is
also considering large-scale solar opportunities, Managing Director
Grant King said Wednesday in Sydney. “Most people still think that it is wind that will clear the RET,” King said. “More solar will clear the RET than people think.”
The industry still faces some challenges. One is financing new
projects amid a reluctance by the biggest retailers to sign supply
contracts and stagnant demand, Leonard Quong, an analyst at BNEF in
Sydney, wrote in an e-mail.
‘Already Wary’
Prime Minister Tony Abbott, meanwhile, has called wind farms ugly and
noisy. His government outlined plans last week to appoint a
commissioner to review wind farms. “Resolving the RET is a good step in the right direction, but the
thing I’d caution against is sabotaging that outcome by introducing
other layers of complications, in the form of new regulation,” Andrew
Thomson, managing director of Acciona Energy in Australia, said by
phone. “Those things are going to spook investors who are already wary.”
While the new large-scale renewable energy target is expected to
attract about A$6 billion less than the previous policy, it’s still
expected to lead to about 7.7 gigawatts of new clean energy capacity by
2021, with 3.6 gigawatts of large solar, Quong wrote. “Over the next three to six months we can probably expect to start
seeing some announcements on new investments,” Thomson said. “We can now
start planning a way forward.”
Copyright 2015 Bloomberg
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