Antinuclear

The Investor Group on Climate Change, which represents Australian institutional investors with $1 trillion in funds under management, on Tuesday said it will urge the Abbott government to ignore a report which it said used incorrect investment assumptions.

Prime Minister Tony Abbott appointed climate sceptic and former Caltex executive Dick Warburton to lead a review into Australia’s renewable energy target (RET) for sourcing 20 per cent of electricity from low-carbon sources by 2020.

The review recommendations, revealed last week, were condemned by the renewable energy industry as a death blow.

The Warburton review recommended closing the RET to new investment or adjusting targets annually depending on electricity demand.

The Australian Industry Group said the RET helped lower wholesale electricity prices and large cuts to the RET would leave energy users worse off.

IGCC chief executive Nathan Fabian on Tuesday said a pivotal assumption of the Warburton review panel was wrong.

“The assumption in the review that moneys not invested in renewable energy will simply be reinvested in other parts of the Australian economy are not right,” Mr Fabian said.

“Investors know they need low-carbon assets in their portfolios and they’re looking for the markets that provide the safest returns, so if you disrupt policies that provide sound investment signals, then that money is going to go to other (geographical) markets,” he said.

Major institutional investors who have built new funds, worth hundreds of millions of dollars, to direct toward low-carbon assets are reassessing whether to invest in Australia or send to European, US or Asian markets with stable investment frameworks in place.

“It’s the unexpected change to the long-term framework that will cause investment losses. That’s the thing that’s really got our people agitated,” Mr Fabian said……..

Mackay Sugar chief executive Quinton Hildebrand said Australia’s second-largest sugar miller also wants the Warburton review to be ignored.

Mackay Sugar is among the top 20 private investors in renewable energy in Australia.

In 2012 it built a $120 million grid-connected steam generator at its Racecourse mill that now supplies 30 per cent of Mackay’s electricity using leftover sugarcane fibre as the generator’s feedstock.

The company has been considering a second plant, worth more than $120 million, at its Marian or Farleigh mills.

“We have the potential to construct additional renewable energy plants across our other sugar mills. However, the government’s adoption of either of the report’s recommendations would rule out these projects,” Mr Hildebrand said.

He said a positive outcome of the review was the acknowledgment that the net impact of the RET on retail electricity bills over time is relatively small.

“The RET scheme is actually increasing the supply of electricity which is putting downward pressure on electricity prices,” Mr Hildebrand said.

He said any changes to the RET scheme would need to pass through both the House of Representatives and the Senate and that Mackay Sugar would “continue to engage in the political process to urge government to adopt a more favourable approach”.http://www.couriermail.com.au/business/investors-urge-australian-prime-minister-tony-abbott-to-ignore-renewable-energy-target-report/story-fnihsps3-1227045078571?nk=bac73ea2ae593147970baba97764d7da