Renewable investors head down under

An annual report by accounting firm Ernst & Young places Australia on equal footing with Poland and up from last year’s ranking of 16 but behind number one ranked China and number two, Germany.

Australia’s position in the index is lagging in terms of renewable wind energy its 20th position likely to be bolstered by today’s announcement of a $1.3 billion wind farm on the Yorke Peninsula but punches above its weight at number six for solar energy.

Ernst & Young SA managing partner Mark Butcher said the unveiling of Australia’s carbon pricing scheme was providing investment certainty for a swiftly-growing renewables sector.

“Whether you like it or you dislike it, (it) gives certainty and allows businesses to be more prepared,” he said.
“Another reason is in terms of economic uncertainty in the face of global market uncertainty, funding looks for a safe home.”

The report points to analyst predictions of annual renewable investment of $4 billion through to the end of the decade with wind projects leading the way.

However, uncertainty around solar subsidies raises many questions from an investment perspective, it says.

“Despite ambitious targets of 1GW of solar power by 2020, following the flooding in Queensland, many of the Government incentives and subsidies for solar energy development have come under review,” it says.

“In May, the Australian Government announced that funding for the Solar Flagships Program will be cut by $239 million over the next two years.

“Despite policy pressures, the Australian Government did award a total of $788 million from the Solar Flagships Program to two solar projects during the second quarter.

“(But) SilexSystems, Australia’s only solar-panel manufacturer, … fears that frequent government changes to solar subsidies, and attempts to reduce or cap FITs (feed-in tariffs), has introduced volatility in the solar industry.”

Mr Butcher said South Australia could benefit from the investment trend, particularly looking at energy demands of mining companies with large open expanses of desert perfect for solar energy and the development of a potential base-load replacement, geothermal energy.

The key to renewables development, he said, lay in the the commercialisation of storage option for non-baseload power.

“Renewables is like any other form of infrastructure funding, which wasn’t understood at first,” he said.

“When Sydney’s Hills Motorway was launched in 1996/96, everyone was scratching their heads because they didn’t understand it (the private investment funding model).

“But look globally now airports, railways, toll toads. We will see renewables moving into that asset class as investors understand more.”

http://www.adelaidenow.com.au/business/renewable-investors-head-down-under/story-e6fredj3-1226126426019