This article is more than 6 years old

This article is more than 6 years old

Plans for one of Australia’s largest solar power stations have been scrapped, in part because of uncertainty over the future of the renewable energy target (RET).

Funding for the $75m, 100-megawatt Mildura solar power station has been suspended amid speculation that the RET will be either scrapped or wound back by the government.

It emerged on Monday that Tony Abbott is backing the closure of the renewable energy target for all new entrants.

Silex Systems, the company behind the project in Mildura, Victoria, said the decision to scrap the plant would result in funding being withdrawn by both the Australian Renewable Energy Agency and the Victorian government.

The business cited low wholesale electricity prices and uncertainty over the RET as the reasons behind the decision. It said it was still keen to develop the site on a smaller scale.

The shelving of the project, which would have provided electricity to 40,000 homes, follows the delivery of a government-instigated report into the RET by businessman Dick Warburton.

The RET mandates that 20% of Australia’s power come from renewable sources, such as solar and wind, by 2020. The government is expected to cut back the scheme as a result of the review, with Tony Abbott previously blaming it for pushing up power prices.

Research released by renewable energy advocates on Monday showed that power prices would in fact go up, rather than down, if the RET was to be dismantled. The report also estimated coal and gas companies would enjoy a $10bn windfall from if the RET was found back, with carbon emissions rising significantly as a result.

Dr Michael Goldsworthy, chief executive and managing director of Silex, said the uncertainty over the RET was harming renewables but added: “We believe that concentrated photovoltaic technology has a strong future in delivering clean, low cost energy to supplement base load power in many suitable regions around the world.”