An energy company has shelved plans to develop a hydro power project in north Queensland, blaming the federal government’s “destabilising” attempts to wind back Australia’s renewable energy target (RET).

Meridian Energy Australia announced on Friday it would not proceed with the Burdekin hydro power generation project, which was intended to “harness the otherwise wasted power of the largest dam in Australia at Burdekin falls”.

The company acquired the rights to develop the project in April 2013. It previously estimated the proposed 52-megawatt power station would generate 150 gigawatt hours of renewable electricity a year, enough to power about 30,000 homes.

The chief executive, Ben Burge, said the company had been working with relevant authorities and the local community to advance the project over the past 18 months.

“Meridian understands the disappointment that the people of northern Queensland will feel on learning of this decision,” he said. “However, the federal government’s protracted efforts to reduce the renewable energy target have made long-term capital investments in energy assets in this country near impossible.”

The RET requires that 41,000 gigawatt hours of electricity be sourced from renewables in 2020, but a government-commissioned review by the self-professed climate sceptic Dick Warburton proposed deep cuts to the target.

After criticism of the review’s findings, the cabinet authorised the environment minister, Greg Hunt, and the industry minister, Ian Macfarlane, to seek a bipartisan agreement with Labor so that industry could have confidence of policy stability.

But Labor withdrew from negotiations in November after arguing the Coalition was not interested in genuine negotiations. The government is now talking to crossbench senators.

Burge said regulatory uncertainty over the RET was the reason for not proceeding with the Burdekin project.

The project would have improved energy security in north Queensland, meeting the growing needs of agricultural and mineral businesses, and provided about 150 jobs during development and construction, the company said.

“Sadly, the decision to undermine the long-term investment signals of the RET makes it more difficult to realise these benefits for Queensland businesses and households,” Burge said.

The opposition leader, Bill Shorten, and the environment spokesman, Mark Butler, said the Meridian decision showed the government’s stance on the RET was costing jobs.

Shorten and Butler said Labor would reopen RET negotiations if the government moved away from its position.

“Australian families will have Tony Abbott to thank when their power bills rise because of his ideologically destructive approach to renewable energy,” they said in a joint statement.

Meridian is not the first company to cite RET uncertainty as a reason for shelving or cancelling projects.

Silex Systems announced in August it was suspending a project to construct a large solar power station in Mildura, Victoria.

Keppel Prince Engineering, a wind turbine manufacturer based in Portland, Victoria, notified workers in October that 100 staff would be made redundant.

Other renewables companies have said the uncertainty has stopped them making long-term investment decisions.