STATE Energy Minister Matthew Groom has returned from Canberra confident the federal government won't abolish the Renewable Energy Target scheme.
Mr Groom met Federal Environment Minister Greg Hunt yesterday to put Tasmania's case forward, following concerns the government would scrap the program.
Hydro generates about half Australia's renewable power, and has pumped several hundred million dollars worth of dividends into the state government's coffers from the RET program since it was established in 2001.
The publicly-owned company has indicated it would put projects like the King Island wind farm on ice until there was certainty on the future of the RET.
The RET was designed to generate 20 per cent of Australia's electricity supply from renewable sources by 2020, but a review released last week recommended no new investment under the program, or scaling back new developments comprising 50 per cent renewables, which would meet the original target set out in the program.
"I have strongly argued that Tasmania's existing investments in renewable energy must be protected," Mr Groom said.
"I have also made the special case for Tasmania's trade exposed major industrials," he said.
Earlier this week Australian Greens Leader Christine Milne said Mr Groom's approach to defending the RET was "like slapping the federal government with a wet lettuce leaf" and accused Prime Minister Tony Abbott of being "out to destroy renewable energy".
However, Mr Groom said he no longer believed the government would abolish the program.
The review also found the RET was on course to overshoot the 20 per cent target, and Bass Liberal MHR Andrew Nikolic has said exceeding the 20 per cent would see "major penalties through higher electricity prices".
Mr Nikolic believes the bipartisan 20 per cent target can still be achieved, while providing relief on electricity prices.
Tasmanian Labor Senator Lisa Singh warned 450 jobs would be lost if the RET was scrapped.
"Tasmania cannot afford to lose the jobs and economic growth provided by renewable energy," Senator Singh said.