HYDRO Tasmania is holding off on further investment in clean energy until the outcomes of a federal government review into the Renewable Energy Target are known.
The company has joined forces with 16 other clean energy investors to send an open letter to federal MPs that warns them not to reduce the RET.
"If the target is reduced, existing wind farms and hydropower would suffer financial distress and the potential for financial failure," the letter said.
Hydro Tasmania chief executive Stephen Davy said in a submission to the review that investment in renewable energy had stalled due to uncertainty surrounding the future of the RET.
While the company continues investigating the feasibility of a wind project on King Island, a spokesman yesterday said it would not progress while the current uncertainty existed.
Tasmanian Labor Senator Lisa Singh said the federal government's "hostile" approach to the RET was threatening the state's economy.
But Bass Liberal MHR Andrew Nikolic said the review was required under legislation, and had been signed-off on by all political parties.
"The panel's findings are due to be handed to the government in the coming weeks and we will not pre-empt the outcome of the review," Mr Nikolic said.
Senator Singh also took aim at Premier Will Hodgman, accusing him of being silent on the issue of the RET.
"When will Will Hodgman start defending Tasmania against the toxic effects of the [Prime Minister Tony] Abbott government's policies?" Senator Singh said.
State Energy Minister Matthew Groom said the government "strongly supports" the RET.
"Our submission arguing in favour of it is clearly on the public record," Mr Groom said.
The open letter warned a significant reduction to the RET scheme would damage Australia's reputation as a safe place to invest in clean energy and infrastructure.
"If left as it is, another $14.5 billion will be invested in renewable energy by 2020," it said.
"Keeping the RET in its present form will ensure Australia's energy sector remains open for business".