July 11 (Bloomberg) -- AGL Energy Ltd., Australia’s largest developer of renewable energy projects, said it delayed a A$550 million ($509 million) wind farm because of uncertainty over government policy to boost investment in the industry.
AGL will defer hiring an engineering and construction contractor for the proposed Silverton wind farm in Australia’s New South Wales state and review its position in 2014, the Sydney-based company said today in an e-mailed statement.
“This decision does not indicate reduced enthusiasm for the project,” Nigel Bean, the head of power development at AGL, said in the statement.
While Australia’s opposition coalition said in March that it’s committed to the nation’s 2020 renewable energy target, it called for a review of the policy in 2014 if it wins this year’s election, which must be held by Nov. 30. Australia plans to generate at least 20 percent of its electricity from renewable energy by the end of the decade as it seeks to reduce its dependence on coal.
Prime Minister Kevin Rudd’s return to the leadership in Australia has sparked a surge in support for Australia’s Labor government, with a poll showing the party has closed the gap with Tony Abbott’s opposition. Labor rose to its highest level on a two-party preferred basis in almost nine months and is tied on 50 percent with the Liberal-National coalition, the Newspoll published July 9 in The Australian showed.
Reviews of the renewables policy should occur every four years, rather than every two years, to give investors more confidence, according to a December recommendation from the Climate Change Authority, which is advising the government.
Macarthur, the wind farm in the state of Victoria operated and part-owned by AGL, obtained A$529 million of loans from lenders on June 27 to help refinance existing debt and support the project, according to data compiled by Bloomberg.
Silverton may become the largest wind farm in the southern hemisphere with a potential capacity of as much as 1,000 megawatts, according to AGL’s website. The first stage of the project is expected to cost about A$550 million, AGL said.
AGL has invested more than A$3 billion in renewable energy in the past seven years, making it the largest developer of projects in the country during that period, the company said.
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