A Victorian manufacturer has become the first employer to cut jobs after the Abbott government revealed its plans to slice the renewable energy target by as much as 40 per cent.
Keppel Prince Engineering said it would mothball its unit building towers for wind turbines at its base in Portland in south-west Victoria.
The firm's workforce of 360 will be cut by almost a third, sinking by more than 100 positions to about 250, said Stephen Garner, Keppel Prince's general manager.
Mr Garner said doubts about the future of renewable energy caused by the government's plan to review and now cut the target for 2020 had stalled investment.
"With the uncertainty with [the renewable energy target], investors have just put their hands in their pockets," Mr Garner said.
Industry Minister Ian Macfarlane on Wednesday confirmed industry fears that the government planned to slash the target for renewable energy.
The government wants to reduce the existing goal of 41,000 gigawatt-hours of clean energy by decade's end to about 27,000 gigawatt-hours, citing an excess capacity in the electricity supply.
Renewable energy developers, such as wind farms, say they invested on the basis of the previous bipartisan accord and that changing the goal would all but stop the industry in its tracks.
About two-thirds fewer plants will have to be built by 2020 to satisfy the need to meet the planned lower target.
The government's lower goal, should it get support in the Senate, "will effectively kill the wind farm industry" in the region and beyond, Mr Garner said.
The company would seek to retain a core group of specialists should the industry recover, he said, adding that Keppel Prince had not won a new order for about 14 months when concern about reviews of the industry began to bite.
The job cuts could have some impact on Victoria's state elections on November 29.
Keppel Prince is located in the electorate of Liberal Premier Denis Napthine, who has pledged to generate 200,000 jobs over the next five years.
