Infigen, Guohua at Risk as Australia Reconsiders Cleaner Energy

Aug 27, 2014 4:00 pm ET

Aug. 28 (Bloomberg) -- Infigen Energy and Guohua Energy Investment Co. are among companies with Australian investments at risk as the government reconsiders its renewable-energy target, according to Bloomberg New Energy Finance.

Scrapping the policy by closing the program to new entrants would probably destroy the value of renewable-energy certificates traded by companies, according to a BNEF report this week. That would lead to significant writedowns in the value of investments and potential bankruptcies, Kobad Bhavnagri, a Sydney-based analyst at BNEF, wrote in the report.

Speculation that Australia will dismantle the target is unsettling an industry that has brought in A$20 billion ($19 billion) since the country set goals for clean energy in 2001. Prime Minister Tony Abbott is taking advice on renewable energy targets from a skeptic about the causes of global warming.

The lead adviser, Dick Warburton, has recommended that the government wind up the target while protecting current investment until 2030, or scale it back to 20 percent of total power generation as originally intended, the Australian Financial Review reported yesterday.

Drastic changes to the policy are unlikely because Clive Palmer, who controls three key votes in the Senate, has promised to block any bid to get rid of the target, according to the report.

Infigen, Meridian Energy Ltd., AGL Energy Ltd., Acciona SA and Ratchaburi Electricity Generating Holding Pcl are among the biggest renewable energy investors in Australia, the report shows. National Australia Bank Ltd., Australia & New Zealand Banking Group Ltd., Eksport Kredit Fonden and Westpac Banking Corp. are among Australia’s largest creditors for renewable energy, it found.