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Clean Energy Finance Corporation is going backwards – Senate Estimates

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The CEFC holds $10 billion of taxpayer money to be used on wasteful green projects. They are meant to get a healthy return for splashing your cash at renewable pipe dreams, but their profit has gone down by 30% in a year.

All of this is to supposedly cut down on harmless CO2, which you and I breathe in and out all day. The fact that the CEFC exists is just another example of how green-left this apparently conservative government has gone.

Transcript

Senator Roberts.

[Senator Roberts] Thank you chair. Could you tell me what is clean energy? Just a quick preliminary question before we get into it.

Well, ideally Senator clean energy is one that is doesn’t produce emissions.

[Senator Roberts] Emissions of what?

Emissions of carbon dioxide or their equivalent is how we would, I guess broadly considered clinically. I mean, it’s not a technical term, but in the, in the general parlance.

[Senator Roberts] So, what’s dirty about carbon dioxide?

Well.

[Senator Roberts] ‘Cause you’re exhaling it right now.

Yeah. I mean, it’s omnipresent around us. I appreciate that, Senator. But what we’re about is is trying to decarbonize the Australian economy in the electricity sector and the ag sector and infrastructure and property and so on. So that’s, that’s what we’re about. And part of that is investing in renewables which are of course, clean energy.

[Senator Roberts] So there are a few leaps there we’ll, we’ll ignore the leaps. But if we look around inside this building and outside. Everything that we see in here has come from the use of energy and human progress over the last 170 years has been due entirely to the ever decreasing cost in real terms of energy except for the last 25 years, since 1996 where the costs have doubled and in fact more than doubled. So we’re reversing human progress on the basis that carbon dioxide is a dirty gas, correct?

In fact, power prices during the day in many states of Australia are extremely low today, and in some cases have been negative. So I don’t know if that is always the case.

[Senator Roberts] Wholesale prices and consumer prices, especially for families have increased dramatically in the last 25 years. So let’s get onto the clean energy finances claim. This is quote, we invest to lead the market operating with commercial rigor to address some of Australia’s toughest emissions challenges in agriculture, energy generation and storage infrastructure, property, transport and waste with $10 billion to invest on behalf of the Australian government. We work to hope that’s the people we work to deliver a positive return for taxpayers across our portfolio. So the clean energy finance corporation is normalised surplus. What some people might argue is a kin to a profit from operations. Excluding extenuating circumstances in 2019-20 was $100.5 million compared with 143.6 million the year before. Isn’t that a disappointing decline? And do you expect a recovery?

We’re very proud of our economic record, Senator and the you know, the operating surplus that we produced last year we think is, we think is a significant achievement. In fact, when you take away from that operating surplus net operating circles the cost of government funding we still produce a profit for the Australian taxpayers. So we, you know I think what we’ve done investing successfully across all those sectors that you mentioned it has been a terrific achievement.

[Senator Roberts] So what does it return? I would calculate it as about 1%.

Well, it depends how you, how you look at it. Senator we, we’ve directed by the government to try and achieve a portfolio benchmark return across across the whole portfolio. And if you look at our sort of cumulative return through to 31 March of this year our return is approximately 4.63%. So I, you know, I think that’s a that’s a very positive return.

[Senator Roberts] Okay. Secondly, the clean energy finance corporation impairment provision at 30th of June, 2020 was $121.1 million compared with 59.7 million in the previous year. So that’s a 100% increase and it represented 5.1% of loans and advances at amotised cost compared with 2.3% in 2018, 19. So it’s more than doubled.

Remember it’s a provision, senators. It’s no, it’s not a loss or right off of any of our assets. And we’re pleased to say that we have negligible losses in our portfolio across the course of the eight years that we have been, we’ve been investing. The increase is a reflection of some of the, you know, some of the challenges that we have taken into account in relation to wind and solar projects and the challenges with grid and marginal loss factors and curtailment. So to be prudent and conservative, we did increase in payment provision substantially last year. I’ll maybe get my CFO.

Senator, I might also just add that one of the factors that we were considering back in August when we were wrapping up the June financial year end was that everybody was projecting at that point that we were headed into a recession. And if you’re headed into a recession, your probability of default on loans will increase. So we prudently put extra money aside to provision for that event. Fortunately, with hindsight now we did not head into a recession. We were back on the way out and we’re, we’re experiencing growth now. So that prudent provision that stood there at that point in time was not needed because we did not suffer actual losses. That was just a provision —

[Senator Roberts] So the 5.1% includes the provision?

That was all provision. So it was purely a statistical calculation on the probability of default. If we had low electricity prices. We were headed into a recession and really the property market as well. People are looking at that and saying, we’re not quite sure what’s going to happen with valuations in property. And so we had to prudently provide for those things fortunately, not required in hindsight.

[Senator Roberts] Okay. Thank you. What are your projections for impairment over the next five years?

Over the next five years, it’s actually spelled out in the budget papers and I can give you that exact number but effectively we’re not projecting an increase dramatically in the provision. So if we look at, I’m on page 166. The budget papers, and we provide in there on about halfway down the page, write down an impairment of assets. There’s in the budget year, 45 million. Now that’s a combination of two things. There’s about 20 odd million dollars of true impairment provision that we allow for. And about 25 million that we’re providing in the event that we have to invest at suboptimal rates to provide some stability in the grid. One of the things that’s factored in here is the grid reliability fund. We expect that we will have to invest equity. In some cases that equity may be at less than market rates. So instead of a concessional charge, it ends up as an impairment charge. You write it down to the fair value. Now that’s to make sure that the grid can cope with the, the ongoing changes to the generation nature.

[Senator Roberts] So how much have you on another question, how much have you written off in terms of lost capital and foregone interest?

Over the entire life of the corporation? I think from memory it’s like, it may be as high as 800,000. We can take it on —

[Senator Roberts] No, it’s, it’s a bit immaterial in the scheme of the scale of the CFC.

It’s lifting the signal. I’m going to give the call to send it to McAlester.

Okay.

[Senator Roberts] Everything that you’re putting money into has a subsidy. It can’t stand on its own merits. Aren’t you lending money out and expecting to get it back?

We, I mean, as you know, as we’ve discussed all our capital expected capital has been returned with the expected income. And, and I’m not sure about your statement there that everything that we’ve invested in is is receiving a subsidy. You know, we’ve a very broad investor, right? From large scale projects to, as I say, in property you know, even, you know, things like the build to rent sector and venture capital and clean technologies. And so I, you know, I’m not sure why you think that all all the sectors and all the companies and projects we’ve invested in would be receiving subsidies.

Senator, I’m Simon Avery, head of government stakeholder relations might be of some assistance there under our act. And this goes to the question you asked earlier about a definition of clean energy technology. The three heads of definition are renewable energy technologies energy efficiency, technologies and low emissions technologies. And so while as you point out renewable energy technologies may have some subsidies. For example, through the renewable energy target for most of the energy efficiency technologies there’s no subsidy involved. And in fact, over the life of the CFC, I think we’ve we’ve made about $9.1 billion worth of commitments. And there would only be about $55 million worth of concessional subsidy that CFC has itself offered 55 million odd over 9.1 billion of lifetime commitments is a drop in the bucket.

[Senator Roberts] So last question chair, the energy minister, Mr. Taylor has cited publicly the Bloomberg graph on investment per capita in various countries around the world in solar and wind. And Australia has double the per capita investment of any other country. Number two country, I think is America. It’s with just over double with six times China’s investment in that, even though they make all of our solar most of our solar panels and wind turbines. So other than providing still further assistance wind and solar. How does this funding encourage private investment in Australia’s renewable energy sector when the evidence suggested that we’re already over investing and bringing bringing quite damaging consequences to us as we’ve heard?

Yeah. I mean, there’s a couple of things in there, Senator, I mean, remember of course, Australia is a world leader in rooftop solar. So, you know, they’ve kind of in excess of two gigawatts of rooftop, solar is is installed each year at the moment in this country. So that accounts for some of the, you know the per capita figures that that you cite in terms of, you know, attracting, you know the use of the private sector and why isn’t that investing well, the good thing is that that we have been creating in private sector investment over the course of, of our life at the CFC and for every dollar that we have, in fact invested we have credited in $2.40 of third party capital. So part of what we’re about is, is coming into, you know into projects, you know, supporting companies and we at the same time are trying to attract in the private sector be they Australian banks, international equity, you know large scale infrastructure funds and so on. And so we’re about bringing in the private sector and you know, not creating any more now.

[Senator Roberts] Thank you, chair.

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People don’t want wind turbines in their backyard – Senate Estimates

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I questioned the Australian Energy Infrastructure Commissioner at Senate Estimates. This is one the dozens of climate related agencies that the government pays for in their never-ending pursuit of renewables.

Transcript

[Malcolm Roberts] Okay. Thank you chair. Thank you, Mr. Dyer, for being here with us.

[Mr. Dyer] My pleasure.

[Malcolm Roberts] The data shows the large project subsidy is around $40 per tonne of carbon dioxide and that’s close to $40 per megawatt hour. If the large scale renewable energy target has been achieved, which is what we’re told why is there a positive price to the renewable energy targets, certificates effectively subsidy when any such price is possible only if the regulatory measures are in place requiring retailers incorporate this energy in their supplies. So if we’ve achieved the target, why is it still there?

[Mr. Dyer] It’s a fantastic good question, but it’s not my area of expertise overall or roles I’m the ombudsman effectively for renewable energy and transmission. So it’s not, one I can comment on

[Malcolm Roberts] Are you the Australian Energy Infrastructure Commissioner?

[Mr. Dyer] It’s formerly the National Wind Farm Commissioner.

[Malcolm Roberts] Yeah the National Wind Farm Commissioner, okay. So the history of manufacturing, the history of farming, the history of just about any service if it’s dealt with closely and evaluated closely then managing a process is most productive and efficient when variation is minimised. So what we’ve got now is an increase in variation of supply from electricity, and that’s the most crucial sector. So the sector that determines our manufacturing success, our agricultural success, our processing success, the quality of life, the affordability of energy is now being driven by increasing variability through wind and solar which have notoriously variable, energy supplies. Is there any thought been given to that? That’s inherently more expensive.

[Mr. Dyer] Senator, my role is to help work with communities and proponents and governments to help the rolled out of projects to occur in the country around the country. I don’t set the policy about what should be put out there on a pathway to help resolve concerns.

[Malcolm Roberts] Do you have any concerns from citizens as I do from our constituents that we’re supposed to be doing all of this stuff, transitioning to unreliable energy because of climate yet, we’re transitioning to the two things that are make us even more dependent on weather and climate variability, seems insane to me. Do you have any constituents as I do who are complaining about that?

[Mr. Dyer] Most constituents, the complaint to us, very supportive of renewable energy, but just don’t want one in their backyard.

[Malcolm Roberts] Why is that?

[Mr. Dyer] Because of the perceived impacts of the visual amenity noise, property values, of fire risk and a whole range of things that might to be tabled to our attention.

[Malcolm Roberts] That’s low vibes, low frequency vibrations in particular?

[Mr. Dyer] Yes. There have been a body of complaints about what’s called infrasound.

[Malcolm Roberts] Yes. Yeah. I’ve heard them of people in severe pain, trauma almost due to it. Has any study being done on the impact of wind turbines on energy and Earth’s atmosphere and the effects of that wind turbines taking energy out of the atmosphere.

[Mr. Dyer] Not to my knowledge.

[Malcolm Roberts] It might seem very minuscule but then you see labor’s carbon dioxide tax was introduced to cut the number of carbon dioxide molecules in air from one in 5.7 million produced by humans to one in 6 million. So that seems very minuscule too but we’ve got a whole industry and the decimation of other industries based on a theory that when in reality nature is shown to control the level of carbon dioxide in the air. So no studies have been done looking at the effect of taking energy out of earth’s atmosphere and out of the earth’s winds that you’re aware of. I’m not aware of any either.

[Mr. Dyer] No, there’s been theories around that. Wind turbines might cause frost because they take the wind out of the sail, so to speak. And the top here that might protect vineyard from causing frost could be at risk. But when we’ve dug into those research matters there hasn’t been any substance to them.

[Malcolm Roberts] Okay. So wind sources of power are not reliable. They’re unreliable, they’re costly inherently so because they’re very low density energy they’re unstable in terms of they’re being asynchronous. When they’re added to the grid, they increase instability. They’re scattered, which increases transmission costs. They have limited life sometimes as short as 10 to 15 years then I have an environmental legacy with massive burials in Wyoming for example. I don’t know what’s going to happen in Australia. Is anyone talking about those issues?

[Mr. Dyer] Decommissioning is certainly a big topic at the moment as we come to end of life of many wind farms around the country and who pays, who is accountable, what is the disposal, disposal mechanism for things their blades is a hot topic. Thank you very much Mr. Dyer.

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Liberal-Nationals have abandoned reliable energy

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The Energy Minister must be asleep at the wheel if he hasn’t even looked at the States’ plans to wipe out reliable coal fired power with unreliable renewables. The WA Liberal-National’s plan is to build 4,500 megawatts of wind and solar to replace the 1,050 megawatts of base-load power that coal provides. This puts the unreliables at a disgustingly low deliverability of just 23 per cent of rated capacity.

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Government admits power grid is critical after influx of renewable energy

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My motion successfully carried today in the Senate.The government has admitted they know that our energy grid is at a critical status because of the influx of renewable energy into the system. Despite this, they continue to chase stupid green-left policies for solar and wind that will destroy the country without reliable, coal fired power.

Motion: The Senate-

  1. notes that:
    1. the Energy Security Board stated in January 2021 that the system security of the power grid is at a critical status after the influx of renewable energy into the system,
    2. in February:
      1. the River Thames froze for the first time in over 50 years,
      2. hundreds of United States cities recorded their coldest temperatures in decades,
      3. wind turbines in Texas froze solid, and
      4. solar panels in Germany were blanketed in snow,
    3. naturally variable weather events place serious strain on power grids,
    4. relying on weather-dependent power generation to save us from weather events is a recipe for power failure, and
    5. reliable baseload power is essential to provide safety and security for Australians; and
  2. calls on the Government to urgently commence the construction of reliable, baseload power generation.

https://parlwork.aph.gov.au/motions/825f4de4-5172-eb11-b861-005056b55c61

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Dr Alan Moran Report – The Hidden Cost of Climate Policies and Renewables

Australia’s excessively high electricity prices are undermining our economic resilience and competitiveness and cutting our standards of living. Since 2002 Australian governments, in a misguided quest to reduce carbon dioxide, have introduced climate policies at the expense of cheap coal and gas power. Our electricity prices, once the lowest in the world, have become one of the most expensive.

This report, commissioned by Senator Malcolm Roberts, undertakes a comprehensive analysis of climate policies and renewable energy subsidies. Australians will be shocked to know the true financial burden of these policies on households and industry. These hidden costs drive up all costs of living, including electricity, food, water and transport.

In summary, the report states the financial impact of climate policies and renewable subsidies:

  • costs households at least $13 billion annually, or around $1300 per household;
  • accounts for 39% of household electricity bills, not 6.5% the Government typically quotes;
  • causes a net loss of jobs in the economy; with every green subsidised job created, 2.2 jobs are lost.

The full report can by downloaded by clicking the button below:

Dr Alan Moran – The Hidden Cost of Climate Policies and Renewables

View online:

200819-Dr-Alan-Moran-Report_

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