Meridian Energy won’t invest further in Australian renewable energy projects if the Federal government’s Renewable Energy Target (RET) subsidy scheme is scrapped.
Chief executive Mark Binns told the company’s first half-year profit announcement since its partial privatisation in October that investment will be put on hold until a decision is made.
The Australian government announced on Monday that the RET scheme will be reviewed.
“The RET is very significant to the renewables industry (in Australia),” said Mr Binns.
“The message given, if it goes, is a significant one. You will see a lot of people will be reluctant to go back into Australia and invest.”
A decision on the scheme’s future was unlikely before September and Meridian expected to “survive in a form very similar to what it is currently”, at least for existing investments.
“We won’t invest further before the regulatory situation in Australia becomes clearer,” said Mr Binns.
Meridian is in the final phase of building a $260 million, 64 turbine wind farm at Mt Mercer, inland Victoria, capable of generating 131 Megawatts. It also owns a smaller South Australian windfarm, at Mt Millar, purchased in 2010 from Transfield for $191m.
The RET scheme targets 20 per cent renewable electricity generation in Australia by 2020, and subsidises wind, solar and other renewable generation options to compete with low-priced coal-fired power stations, which produce much of Australia’s electricity and give the country a heavy carbon footprint.
The scheme is estimated to cost Australian consumers around $1 a week on the average power bill, and was described in The Australian newspaper this week as a “hidden carbon tax” that was hiking power prices by stealth.