Australia has already been bypassed once by the world’s leading renewable energy developers, and risks doing so again if it makes more changes to its green energy policies, according to one of the world’s biggest energy groups.

The Australian clean energy market nearly became a wasteland after the Howard government refused to extend its hugely successful start to the country’s first Renewable Energy Target, causing many international and Australian companies to leave the country and manufacturing facilities to be closed.

There are concerns of a similar flight of interest, and capital, if the government makes changes to its 2020 Renewable Energy Target, which is expected to be the bedrock for some $20 billion of investment in wind energy and solar farms in the next eight years.

Rafael Mateo, the global head of energy at Spanish group Acciona, the world’s largest green-only energy developer, says Australia is effectively competing with other countries in Asia, Africa and the Americas to attract capital for investment in clean energy.

Acciona sources about three-quarters of its revenue from its home base in Spain, but is now moving rapidly to flip that figure upside down and is seeking the majority of its revenues in the international market. It has been particularly active in South Africa, where it has won bids to construct wind and solar-energy plants, and in South America, where in Chile banks are financing wind and solar projects even without subsidies and power purchase agreements. India is also looking particularly attractive.

“We are looking for countries with a clear policy about renewables and looking to countries which are looking to install capacity,” Mateo said in an interview with RenewEconomy“We are expanding in emerging countries and we are trying to expand operations in Australia,” he said. “It is clear that the carbon tax is penalising co2 emissions and we are moving to a world with more expensive conventional generation, and thermal generation with less expensive renewables technologies. We are confident about the renewable generation market. The defining feature (of our investment choices) is the policy environment.”

Andrew Thompson, Acciona’s country head in Australia, said the company was concerned about talk of changes to the RET, or even a recent push to change policy incentives to an auctioning system. He said that while the Grattan Institute proposal for a series of capacity auctions was a valid idea (it has been used in South Africa where Acciona is building capacity), it was wrong to suggest the policy should be changed mid stream.

“You can’t just tear up existing policy and start over again,” he said. “It could take several years to debate and agree on how a new policy would look. We’re happy with the RET in its current form. AEMO (Australian Energy Market Operator) may revise demand forecasts. Don’t see a point changing a target every two years just because demand forecast is changed.”

Mateo was in Brisbane as many of Acciona’s senior management arrived for the launching of the Prado exhibition, which the company is sponsoring. He said wind energy would continue to grow quickly, although it was difficult to see costs falling much further because capital costs — driven down by loss-leading Chinese manufacturers — were already approaching costs of around $1 million a megawatt.

“There is no other industry that is growing at 40% a year,” Mateo said. “Many countries need to change their fuel capacity and replace it with clean energy, so there are a lot of possibilities in the renewable market. And it is so much quicker and easier to build renewable generation than conventional generation.”

Acciona is also one of the leading companies in concentrated solar thermal — building plants boasting parabolic trough and solar tower technologies, and recently adding molten salt storage so that such plants can become “dispatchable” like gas-fired power stations.

He said even solar thermal CSP is also already operating at about $150/MWh in countries with good sun, such as South Africa and Australia, and Acciona argues that this should draw the attention of big miners such as BHP Billiton and Rio Tinto, which are paying $300/MWh or more for diesel at remote mine sites.

“There’s got to be a shift in mindset from having a diesel generation plant they know well and which is relatively cheap to build, to shifting towards a highly technical generation source and perhaps outsourcing the management and ownership of that asset through a third party that knows how to operate that,” Thompson said.

Mateo says PV is heading towards $100/MWh and it was interesting to note that in some countries, financing had been offered by banks without subsidies from the government, and even without power purchase agreements. In Chile, for instance, the cost of energy is $100/MWh, which allows wind and solar PV, in some instances, to compete. Mateo said there could be opportunities to combine CSP installations with solar PV.

Mateo conceded that Spain was no longer a growth market because the country had a surplus of capacity, partly caused by the huge investment in renewables in recent years. However, this had also created large green-focused energy developers such as Acciona which were expanding rapidly onto the global stage.

“They are taking their expertise all around the world,” Thompson added. “Australian policymakers sometimes lose sight of that. In a country like Australia, we are enjoying strong economic conditions, and we have a huge opportunity to become leaders if we choose to.”

*This article was first published at RenewEconomy