Originally published on RenewEconomy.
Spain’s Banco Santander, the biggest bank in Europe by market value and once the world’s largest financier of renewable energy projects, has decided to sell its only Australian renewable energy investment and quit the country’s renewables market, due to Australia’s policy uncertainty around the renewable energy target.
The decision by Banco Santander to sell its 90 per cent stake in the 106.8MW Taralga wind farm, in which it invested in 2012 soon after its arrival in Australia, is testimony to the changing fortunes of the Australian renewable energy sector, which has effectively ground to a halt in the 18 months since the election of the Abbott government.
The decision to sell was reported by Fairfax media, which cited unnamed sources. It follows a decision to establish a global renewable energy fund with two Canadian pension giants, but Australia was excluded because of the perceived poor prospects for the sector in this country.
The decision comes as Keppel Prince, which makes wind towers in Portland, Victoria, appealed for a resolution to the stand-off over the RET, with the Abbott government wanting the 41,000GWh target to be cut to 32,000GWh. Labor says it is too low, while the Clean Energy Council has proposed a compromise of 33,500GWh.
A host of renewable energy investors – including GE, Spain’s Fotowatio Renewable Venture and the Children’s Investment Fund (an investor in Infigen Energy), have warned that long-term infrastructure investors are being deterred from investors.
Last year, two of the biggest renewable energy developers, Yingli Green Energy and Goldwind Australia, Chinese based solar and wind providers respectively, warned of investment risks for Australia and how the RET uncertainty could impact on international strategic decisions.
All renewable energy development companies have put their development portfolios on hold, while one 1,500MW solar portfolio held by Recurrent Energy was effectively sold to Canadian Solar for free.
Also today, New Zealand’s TrustPower outlined how the renewable energy market could be affected if a compromise deal was reached. The capacity needed to be built, and the investment, could be cut by half. TrustPower also outlined how Australia’s attraction as an investment destination for renewables has been thrown into reverse.
Reprinted with permission.