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Snowy 2.0 continues to throw good money after bad

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I questioned the Snowy Hydro Authority on the Snowy 2.0 project at Senate Estimates.

Snowy 2.0 is a ‘big battery’ that pumps water from the Talbingo Reservoir up to the Tantangara Reservoir during the day when there is excess wind and solar electricity, then lets the water down during the evening peak to generate electricity when the sun isn’t shining and wind isn’t blowing.

If this sounds like we are planning on generating electricity twice to use it once, that is exactly what pumped hydro does.

The original cost of $2 billion is now out to $5.9 billion and likely to go over $10 billion. In addition, the transmission lines to bring the power into the grid will gouge out national parks and farmland, and cost another $10 billion. And their main boring machine has been bogged for more than a year.

I asked if this project is worth continuing.

The lack of detail around how much the power will cost electricity customers is frightening.

Listen to the answers. It sounds like the Snowy Authority is planning to profiteer by having the only power available when solar and wind are not generating enough power.

All I can say is be worried – this Government is actively planning massive increases in power bills.

Transcript

Senator Roberts: Thank you for appearing again today. Florence is now acknowledged to be bogged. When will it be unbogged?

Mr Barnes: I expect in weeks, not months. As soon as the slurry plant is operating, we’ll push forward, obviously in close consultation with our colleagues at DPIE and Parks, but we expect it to be relatively soon.

Senator Roberts: I empathise with you, having managed underground projects, some quite large—not as large as this one. There is a lot of uncertainty, and it’s hard telling people who are looking on how to think about this. It’s very difficult to describe.

Mr Barnes: You’ve got to see it to believe it.

Senator Roberts: That’s right. We’ve got journalists—admittedly journalists—now saying it’s time to cut our losses on Snowy 2.0. If the project is completed and all the high-voltage transmission lines are built across farmyards and national parks, there must be a calculation that takes the capital cost of the project as a whole and divides that by the life of the project to get a figure for how much the annual amortisation charge for the capital costs will be. Do you have the latest projection, please?

Mr Barnes: There was quite a lot in your question. Obviously we haven’t got an updated cost here, and we’ll provide that in months. We don’t have the cost of transmission, so I wouldn’t be able to provide that. I fully expect, through our corporate plan process, we’ll assess the returns from Snowy 2.0, and, if anything, the commercial case for it has got stronger since FID.

Senator Roberts: Sorry?

Mr Barnes: The commercial case for it has gotten stronger since the financial investment decision.

Senator Roberts: There were many factors that drove that commercial decision in the first place. Well, it wasn’t commercial, from what we understand, because there was no cost-benefit analysis, and the business case was redacted heavily, under Malcolm Turnbull’s prime ministership. This annual amortisation charge, which you can’t provide, is combined with annual costs like labour and maintenance to calculate what the real cost per megawatt hour will be once the project starts. You wouldn’t have the projected cost per megawatt hour either then?

Mr Barnes: That’s correct, but to think about Snowy 2.0 in megawatt hours is perhaps not the right way to think about it.

Senator Roberts: It’s a battery.

Mr Barnes: Yes, but it’s the provision of dispatchable demand over very long storage duration that allows lots of variable renewable electricity to be delivered. So we look at the business case in a much more fulsome way across the whole Snowy business. For example, over the past few years, we’ve procured 1,500 megawatts of solar and wind PPAs to enable the transition, which assets like Snowy 2.0 support. I think you’ve got to look at a whole-of-business business case, and the simple amortisation plus labour is, perhaps, too simplistic a way to consider the business case.

Senator Roberts: Now you’ve got me really worried. It’s not your responsibility with the solar and wind, but now I’m terrified of it. Your website lists the levelised cost of storage at between $25 and $35 per megawatt hour. On 340,000 megawatt hours each year, this suggests an annual cost of $11 million, including operating costs, maintenance, capital costs and the cost of buying the electricity to pump the water uphill. Is the $25 to $35 figure still accurate and, if not, what is the new figure?

Mr Barnes: I’ve not got a calculator that capable in my head, but I think there might be a multiplying factor out on those numbers. The levelised cost of storage I think we have on our website is sourced from international studies and our view of levelised cost of storage. I don’t have the updated figure in my head at the moment.

Senator Roberts: Our staff team did some calculations. Now, admittedly, we don’t have all the costs, but it just seems ridiculously low. When we pile on these extra costs of the delay, we’re wondering about what will happen.

Mr Barnes: Just to be clear, the levelised cost of storage is what one would add to variable renewable electricity to provide a firm product. Also, the 340,000 megawatt hours of storage is not deployed over a year. It will be deployed multiple times through the year, depending on the market dynamics.

Senator Roberts: It seems to us that the capital cost is becoming a huge stumbling block. Even if you take just the cost of the project, at $6 billion—and there are serious doubts about that now—and amortise those across 50 years, the annual capital charge will be $120 million, and double that if you add the pole and the wires. That puts the cost of your electricity at over $700 per megawatt per hour, including the poles and wires. The current spot price for last weekend—admittedly the weekend was cold down here—for last weekend was $150 per megawatt hour. Is there something we’re missing?

Mr Barnes: We’ll certainly do a full financial review of the project when the increased costs are known. But I think you’re mischaracterising the nature of the asset in that it isn’t an energy provider. It’s an insurance provider for when the wind isn’t blowing, the sun isn’t shining or there is plant failure elsewhere. So we don’t sell it as a baseload energy price, which is what you’re referencing.

Senator Roberts: Hasn’t it been touted as a peak period source of electricity?

Mr Barnes: The two major sources of revenue will be the difference between the price we pump the water up to Tantangara, which will soak up demand from solar and wind when it’s not required, and the price at which we sell it in peak periods when solar and wind aren’t available or other plants are not available. So it’s an asset about being there when everything else isn’t. It isn’t sold on an energy basis, which are the reference prices you’re quoting.

Senator Roberts: Okay. But the projected cost must be the single most important KPI of this project.

Mr Barnes: Cost and schedule are my most important KPIs. The reason we came out with the schedule is that there are many stakeholders interested in the schedule, and we’ll work through the cost and associated business plans around that.

Senator Roberts: There seems to be a real risk, though. I acknowledge your point that we can’t just charge per kilowatt hour—or we can’t just recognise a per kilowatt hour figure. But there seems to be the real possibility that the price of electricity generated, recovered and stored will be massive, even without government subsidies coming in year after year.

Ms Barnes: I think that’s for others to comment on. My focus is on getting the project at schedule and cost and making a business case for it, which I think is very strong. There are many other factors which will determine the price of electricity.

Senator Roberts: Minister, can you provide on notice the current projected cost per megawatt hour of electricity generated by Snowy 2.0 on the first year of operation, please?

Senator McAllister: Senator, I will take that on notice. I would also direct you to the evidence given to you already by Mr Barnes in relation both to the variability in the electricity market that Snowy will participate in but also—

Senator Roberts: A lot of variability means uncertainty.

Senator McAllister: Senator Roberts, I think that Mr Barnes has given an indication that he thinks it’s a strong business case and they’re presently working through it. I have taken your question on notice.

Senator Roberts: Thank you. This had nothing to do with your government, but right from the start of this project, Malcolm Turnbull’s government refused access to the cost-benefit analysis and heavily redacted the business case. There have been lots of questions about this project right from the start and now there are even more questions—and I don’t blame Mr Barnes for that.

Mr Barnes: My interest is running a commercially viable and efficient company, and that’s what I’ve done all of my career. The reason I joined Snowy was to get the opportunity to deliver Snowy 2, because I think it’s an incredibly important asset to the energy transition. I fully expect it to be very commercial. We’re trying to deal with the hardest part of the transition, which is providing deep storage to enable more renewables. So I expect it to be a very commercial business.

Senator Roberts: Can I confirm media reports that Snowy Hydro was found in a third independent audit last year to be noncompliant on environmental plans in 15 instances and that you have at last 10 management plans overdue?

Mr Barnes: I think, Senator, that you’re maybe referring to a National Parks Association report that was released last Thursday, without consultation with Snowy Hydro. We are currently operating under all of our construction approvals. So there are no breaches there. The plans and requirements as a result of the construction and operation of Snowy 2 obviously changed in nature over time. There are some that are relevant to construction, and we’re fully compliant with those. There are some that are relevant to operation and some that are relevant to rehabilitation. We work closely with all of the agencies to make sure that they’re reviewed and consulted on in every thorough way. I think there’s been a misunderstanding of some of the dates on various websites. So I have reached out to the National Parks Association to help them understand how it operates.

Senator Roberts: So it’s a misunderstanding that 10 of the 16 management plans for multibillion-dollar pumped hydro projects are overdue by 31 months, as reported in the media, citing the National Parks Association? So you think they’ve got it wrong somewhere?

Mr Barnes: The plans that are being referred to are prepared by Snowy and they are reviewed by various agencies. In consultation with the agencies, some of the dates that were originally envisaged are not being met and, therefore, are phases of the project which are way into the future. One of the things that may be useful for us to do is to work with the various agencies to make that understanding of how this process works. I would have happily taken the National Parks Association through that process.

Senator Roberts: Okay; so they jumped the gun?

Mr Barnes: They didn’t consult with Snowy Hydro before releasing it to the media.

Senator Roberts: Can I go to your opening statement? You recently announced a one- to two-year delay.  That’s a heck of a range, 100 per cent—from minimum to major.

Mr Barnes: It’s a project that’s being constructed over more than one to two years. It’s been in construction a few years. I think it was appropriate to give a range until we do more work.

Senator Roberts: I appreciate your honesty. I am not questioning your honesty—and I appreciate that you have given us that figure. But, for the project, that’s a pretty big number. What was the original planned project duration?

Mr Barnes: It was before my time. Perhaps we’ll come back to you. We gave a notice to proceed in mid-2020 and power was expected in 2025-26.

Mr Whitby: First power was for 1 July 2025, from a notice to proceed from August 2020. So five years was the original—

Senator Roberts: So the delay is 20 per cent to 40 per cent?

Mr Barnes: That would be the simple maths.

Chair: Senator Roberts, I’ll get you to wind it up and share the call, if that’s okay?

Senator Roberts: Okay. You mentioned in your statement the combination of four factors. What are the four factors? I’ve been through your statement and I couldn’t see them.

Mr Barnes: In our advice to ministers and in our media release we identified the effects of COVID and bushfires on the mobilisation of the project, the effect of many global factors on the availability of skilled labour and also the costs of materials. There’s a lot of steel and concrete in the project. We’ve found that some elements of the design—as we’ve gone through the process of design—are, in some cases, more costly to complete. And finally, the site conditions, of which the Florence ground conditions are the most impactful, also includes things like additional eroding. They’re the four factors.

Senator Roberts: Good luck getting that machine out.

Mr Barnes: Thanks.

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ARENA hands out $2.15 billion in subsidies to supposedly “cheap” renewables

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We constantly hear that “renewables” are the cheapest and the best way to go. If that’s the case, why does the Australian Renewable Energy Agency need to commit $2.15 billion in subsidies, grants and loans to prop up “renewable” projects?

Transcript

Senator Roberts: Thank you for appearing today. The latest figures I have about funds committed, as at June 2022, is $1.86 billion committed across Australia. That is from the 2021-22 annual report. Do you have the most recent figure on what you have committed?

Mr Miller: The most recent figure is $2.15 billion.

Senator Roberts: It’s constantly jammed down Australian throats that wind and solar are the cheapest forms of energy. Why do you have to commit billions in subsidies to wind and solar if this is the case? If they are so much cheaper, shouldn’t they be able to survive without your subsidies and just simply beat coal and gas in the market?

Mr Miller: ARENA hasn’t given much, if any, support to wind projects, in our history. When ARENA was formed 11 years ago, wind was relatively mature and didn’t need much support. Solar was an industry where Australia had a research advantage and a burgeoning research community, and ARENA stepped into that space and continued providing research funding to solar.

I think it’s entirely appropriate that we aim for lower cost, higher efficiency and more sustainable solar materials. That is what the work that we do supports. In terms of our support for solar, our key program in that respect was in 2016-17 where the intervention that ARENA and the CEFC provided the industry, with $92 million funding to two large-scale solar projects, drove the cost of that technology down from $2.50 a watt to $1.25 a watt following that program to the point where large-scale solar is economic in Australia—and the International Energy Agency says is the cheapest form of electricity generation in history. 

ARENA’s continued support for solar R&D is to create a sustainable, comparative and competitive advantage for Australia in this important technology, to unlock the potential for solar to be that form of ultra low-cost generation to support a giant iron and renewable steel manufacturing capability in Australia and to provide low – cost energy into our industrial system and to our domestic users. We take that responsibility seriously, and we are very excited by the opportunity to continue to support solar PV research, manufacturing and production in Australia to that effect.

Senator Roberts: Could you take on notice to explain in depth the cost structures around solar that you are contributing to at the moment, please? In simple terms, the generating of solar is cheap but, by the time we add the doubling or the tripling of the area needed because of the variability in nature and then you add the battery storage, it’s very, very expensive.

Mr Miller: Senator, I’m not clear what you want me to do.

Senator Roberts: I would like the levelised cost of solar produced electricity equivalent to coal in terms of quantities and reliability?

Mr Miller: I would point you to the good work that the CSIRO has done in collaboration with AEMO in their GenCost analysis, which is thorough analysis by the team at the CSIRO, which shows you the levelised cost of solar on its own and wind on its tone and then adds storage to that, which is a proxy for firming. I would suggest that we would not be able to provide you with any more information than that high-quality work that has been done by the CSIRO.

Senator Roberts: That’s fine; thank you, Mr Miller—because the CSIRO’s assumptions are just woeful. If that’s the best and you term it excellent, we’re in trouble. That’s my view. So thank you for saying that.

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Clean Energy Finance Corporation defends rubbish returns on wind and solar

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The ASX200 is the Australian benchmark for investment returns, if you’re not matching it many people will ask why you even bothered.

The Clean Energy Finance Corporation “invests” your taxes into pipe dream “renewable” projects. We’re told that these investments are some of the best things in finance, in reality I think they are a scam.

My question was simple, if the CEFC is making such good investments, why would putting money into the ASX200 have made a 22% better profit over the last 10 years?

Click here for Transcript

Senator Roberts: At the last Senate estimates, I submitted some questions on notice asking for how the returns for wind and solar investments compare to other financial investments or benchmarks. The CEFC answered very vaguely and essentially said, ‘Depends.’ The number for that question and response is SQ23-000642. In your annual report, you are happy to tout a percentage but not in your answer to me, apparently. In your report you say, since the Clean Energy Finance Corporation’s inception you have achieved an annualised return of 4.48 per cent, which adds up to 55 per cent in total over 10 years. The ASX 200 over the same period has returned 67 per cent. That’s 27 April 2012 to 20 May 2023. An investment in the Australian benchmark would have returned a 22 per cent better profit than the Clean Energy Finance Corporation. Why are your investments in supposedly clean energy, which is not clean—just have a look at what happens when heavy metals out of abandoned solar panels get into the water supply or oil from a malfunctioning wind turbine leaks into the ocean—so poor compared to the Australian benchmark?

Mr Learmonth: There are a few things in there. Firstly, that 4.48 that you refer to doesn’t just cover renewable energy of wind and solar, if that’s what’s going to be in your sights; it covers the whole portfolio, and that’s everything from green bonds, loans to industrial companies to reduce emissions, technology investments with venture capital, limited partnership interests in funds in sectors like the built environment, agriculture and infrastructure. So it’s very, very broad. You can’t possibly hone it in just around wind and solar.

The other thing I would note is you’re making the point that our returns appear inadequate or are below what other commercial benchmarks should be. The CEFC’s capital is about driving policy outcomes as well as making appropriate return, so it’s about decarbonising the electricity sector. It’s about fuel switching and energy efficiency. In many cases, we may make a below-market return because that’s what’s needed to bring a project online or take a technology down a learning curve. So I don’t think you can use those very sweeping references to apply to the CEFC.

Senator Roberts: Let me interpret that. You’re saying that the subpar performance is a cost of subsidising government policy objectives?

Mr Learmonth: I wouldn’t put it like that. I would say that if you felt that we weren’t reaching some kind of commercial benchmark, that’s probably a reflection of the way that we are using our capital to deliver on the policy objectives of the CEFC. But, equally, we are a lender. Today 70 per cent, broadly, of our portfolio is debt. So you can’t compare it to an index like the ASX or some ETF or whatever it might be, because a secured loan is a relatively low yielding investment compared to putting money into a technology company where you might expect 25 per cent. So, again, I don’t think we are comparing apples with apples.

Senator Roberts: That’s fair enough. I’m asking for more details, because the response to the question on notice was not detailed and not respectful, in my opinion. It was very vague.

Mr Learmonth: I’m happy to provide you with more information around that and break it down by sectors to demonstrate that and give you a bit more background to the return, the 4.48 that you refer to.

Senator Roberts: Can you take that on notice?

Mr Learmonth: I can do that, very happily.

Senator Roberts: Perhaps something else you could take on notice is: why should Australian taxpayers be giving you the extra $20.5 billion Labor has given you in this budget, given you are not even close to the Australian benchmark. You can explain why you’re not close to the benchmark. That’s fair enough. But why should the Australian taxpayers be giving you an extra $20.5 billion?

Mr Learmonth: I can start, and I’m sure others may have views on this. The money is being appropriated and delivered to the CEFC to help deliver on some very defined policy objectives, like Rewiring the Nation, like Household Energy Upgrades and, thirdly, investing in growing technology companies here in Australia. We were proven to have done a very good job over the last 10 years on investing, lending and using capital to achieve these environmental outcomes. One can only assume that’s why the government was prepared to back us into doing more.

Senator McAllister: Senator Roberts, obviously you fundamentally don’t believe that it is necessary to reduce carbon emissions.

Senator Roberts: I know so.

Senator McAllister: It is a difference of opinion between you and the Australian government. As I understand it, it is also a difference opinion—

Senator Roberts: Minister, you have repeatedly failed to provide the evidence for your policies.

Senator McAllister: between you and the opposition, as I understand their policy.

Senator Roberts: I think the opposition wouldn’t agree with me.

Senator McAllister: Putting that to one side, having agreed that our policy is to reduce Australia’s emissions, we therefore have to look at the policy levers that are available to us. One of the very successful levers, in my opinion, in the Australian landscape has been the CEFC. It is a different model to one that might conventionally be adopted using grants or direct funding to proponents, and instead seeks to increase financial flows into the clean energy sector, as Mr Learmonth has explained to you. It is one of a number of tools that the Australian government seeks to use to drive investment in the clean energy sector, and it has met that objective.

Senator Roberts: I understand that, but, repeatedly, you have failed to provide the specific effect of human carbon dioxide on any climate factor—temperature, storms, rainfall. You’ve repeatedly failed to provide that basis for policy. The whole thing is just running on fluff.

Let’s continue the questions. I asked you on notice at the last Senate estimates if you had done modelling on what percentage of your returns are attributable to government subsidies and policies. Your answer to me was ‘yes’, as part of your due diligence. It is question No. 2 from the question on notice that I asked before. Question No. 2 says: Have you done any modelling or investigation to find what percentage of these returns are attributable to government subsidies or policies?

Your answer was: All revenue streams are taken into account as part of transaction assessment and due diligence. So your answer to me was to say yes, as part of your due diligence. Given you’ve done that analysis, what percentage of returns for investments are attributable to government subsidies and policies?

Mr Learmonth: I’m just trying to understand your question, Senator. Our returns come from using government dollars—taxpayer dollars—that are either lent or invested by the CEFC. Therefore, using those dollars, we either receive interest or dividends, or, potentially, we might sell an equity investment and make a gain. That’s where our revenue comes from. When you ask what percentage of that is coming from government subsidies, all our capital is coming from the government. All our returns come from the deployment of government capital. I’m just trying to understand what you mean by ‘subsidies’ there.

Senator Roberts: Do you get a return on your investment?

Mr Learmonth: Absolutely—

Senator Roberts: So what percentage—

Mr Learmonth: You inquired about it earlier, and that’s correct.

Senator Roberts: Right. So what percentage of that is due to government subsidies?

Mr Learmonth: Again, I don’t quite understand your question because all our capital is provided by the government. Someone might say, ‘Well, that’s not really a subsidy, it’s a provision of capital from Treasury.’

Senator Roberts: Accept that.

Ms Learmonth: Therefore, we’re not the recipients of subsidies. I might see if my—

Senator Roberts: Let me—

Chair: Mr Learmonth, I wonder if you could, in a very pithy fashion, outline the kind of organisation you are and its intent, because I think the senator has misunderstood that.

Senator Roberts: Perhaps I could clarify something: what part of your returns from your borrowers enables them to succeed because of government subsidies? They wouldn’t have provided a return without those subsidies.

Mr Every: Are you thinking about matters such as the large-scale generation certificates, which the Renewable Energy Target—

Senator Roberts: No, I’m not thinking about that. I’m thinking about the actual return—the income that a person who is the borrower of your money, or our money, is able to make because of subsidies for solar and wind.  Without those subsidies, would you have got a return?

Mr Learmonth: Oh, so you’re referring to, say, a household subsidy for having solar panels, for example—

Senator Roberts: More to the point: you don’t lend to households, I take it?

Mr Learmonth: We do via intermediaries; we actually do. We use—

Senator Roberts: But most of your lending is to large—

Mr Learmonth: Yes, a substantial portion is to large projects, large companies. That’s part of it, but we also use intermediaries and partners like large Australian banks, for example, to provide mortgages for people to stimulate people to make their houses more energy efficient or to buy a more efficient home. They might access a green mortgage, so there’s a very broad range of borrowers. They pay back the loans out of the money that they’re generating in their business. That might be a small manufacturing company, it might be an agricultural company, or it might be a solar farm. Whether they are entitled through their businesses to subsidies, discounts or benefits through state and federal governments, one can only speculate about that.

Senator Roberts: Your mission and values say that the Clean Energy Finance Corporation is a specialist investor with a deep sense of purpose to invest as Australia’s green bank to help achieve our national goal of net zero emissions by 2050. How many of your borrowers make a return because of government subsidies for solar and wind? In other words, without those subsidies, you would not be getting a return.

Ms Learmonth: I’m not sure about that. Let’s talk about a solar or wind farm. We may lend them money to help them build out the generation plant, the wind turbines, the solar panels, for example. They either sell the electricity into the spot market, or they might have a contracting arrangement, so they generate income through that. Yes, a large utility-scale renewables project will also receive a generation certificate, a renewable certificate, which traces its way back to a different government policy, the RET, Renewable Energy Target, so some component of the income of a renewable energy project does come through a former government policy. But the majority of income comes from the sale of those electrons either to someone who wants them or into a market like the NEM spot market. They make that money, and, if we’re the senior lender, we’re the first person they’ll pay.  They’ll pay us back interest and principal through those revenues.

Senator Roberts: Do you have any idea why, when we’re told that solar and wind are now the cheapest form, we still need subsidies?

Mr Learmonth: We know that wind and solar, based on the cost of it and what they can produce, is today the lowest cost of energy.

Click here for Transcript

Senator Roberts: You told me in the answers to questions on notice that you’ve done the analysis. Now you’re telling me that we can only speculate on what those businesses are receiving in terms of subsidies that contribute to your returns. What is it?

Mr Learmonth: I guess I’m just trying to use some examples to try and flesh out what you mean by subsidies. Are they subsidies that are being provided to our borrowers?

Senator Roberts: Yes. You understand their money streams. What is the proportion of subsidies in there?  In other words, the government is paying to help you get a return on your loans.

Mr Learmonth: In some cases there are companies we have lent to that are recipients of state government benefits. And for some reason they might—

Senator Roberts: The point is you’re investing in something that needs subsidies to survive, so we’ve got the government giving money under a loan and then relying upon other subsidies, from the same taxpayers—maybe state, maybe federal—to get a return back.

Mr Learmonth: Just in terms of wind and solar, even if you backed out the subsidy around the generation certificate, they would in most cases still be able to pay their debt. We don’t come up with the subsidies. We are there looking at projects and companies—

Senator Roberts: I’m not accusing you of coming up with the subsidies. I’m saying that your borrowers cannot pay it back without those subsidies.

Mr Learmonth: I don’t think that’s right.

Senator Roberts: Could you give me the figures that show that, please? You’ve said you’ve got the analysis.

Mr Learmonth: The only borrowers that we have where a part of their direct revenue source or generation may have some form of government subsidy is probably wind and solar, because they are recipients, but there are other ones that have no government subsidies.

Senator Roberts: Let’s move on to something that’s associated, because you don’t know the income streams. I also asked you in Senate estimates, on notice, what the risk to wind and solar investments was from a change in government policy. You didn’t answer what the risk was. You just said that you have assessed the risk, like any prudent investor.

I asked: Political risk is one of the most basic elements of a assessing a business case. What is the risk to wind and solar investments if the government were to abandon their net-zero policy?  Which some jurisdictions around the world are discussing right now. The answer I got was: The question is a hypothetical but suffice to say, like any prudent investor, the CEFC undertakes due diligence into risks to any revenue stream, and structures its investments to ensure that it is not unduly exposed to risk, including policy risk. If you have assessed the risk, what is the risk?

Mr Learmonth: What is the risk of a government abandoning—

Senator Roberts: Financial risk—what is the risk to your loan?

Mr Learmonth: It’s hard to speculate. We would look—

Senator Roberts: But you’ve assessed it.

Mr Learmonth: Yes, because we would have looked at it and we would have gone: What sort of generation would this wind or solar farm produce? Do we estimate that power prices over the term of our loan—it might be five years; it might be seven years—will introduce some element of risk to those cash flows? And then we would have looked at whether or not our debt could be paid back. If a future government changed policies around net zero, it would take some while before that potentially would have any impact. I think it’s not a risk that we would be factoring into it, because we’re looking at the more immediate and realistic options.

Senator Roberts: You’ve said you’ve done your due diligence but you can’t put a handle on the risk. I put it to you that the government abandoning net zero targets would be catastrophic for your investments. Without targets, there are no subsidies, and the generators couldn’t produce a return and pay back the loan.

Senator McAllister: Senator Roberts, I think the problem with the line of questioning you’re pursuing with Mr Learmonth is that you assume that investments in the National Electricity Market are driven by subsidies, which you have not identified. All over the world renewable energy is increasing because of its technological advantages and because of the cost profile of alternatives—

Senator Roberts: Hydrocarbons after—

Senator McAllister: May I finish?

Senator Roberts: Yes.

Senator McAllister: Particularly where either the overall demand in an electricity system is growing or assets need to be replaced. I think you have repeatedly mischaracterised Mr Learmonth’s answers to you and then put the question back to him in a form that misrepresents the position he has just put to you. To be fair to the officer, he is doing a good job at describing to you the processes that the CEFC go through in examining investment opportunities.

Senator Roberts: Well, combining what you’ve said—

Chair: Senator Roberts, I’m going to have to make this your last question.

Senator Roberts: I’ll move on. I note that, as you said in those same answers, you don’t screen any investments for connections to political donations. Don’t you think that some basic due diligence is needed?  Shouldn’t you be bringing it to the attention of the minister if you are about to give a company hundreds of millions of dollars and it has made a political donation?

Mr Learmonth: We undertake very significant due diligence on all our borrowers or investee companies. We would look at whether there was some overt political connection—

Mr Every: We’re actually required to under the AML/CTF laws, the anti-money laundering and counterterrorism financing laws. We are required to identify politically exposed persons, and that is part of the due diligence.

Senator Roberts: Senator McAllister, in response to your comments: the world has globally invested trillions of dollars—I think the figure may be $150 trillion, but I may be wrong on that—and the share of energy used on the planet from hydrocarbons has gone from 82 per cent to 81 over the last 10 to 20 years, despite trillions of dollars going into solar and wind.

Chair: I’ll take that one as a comment.

Senator Roberts: Yes. It’s not a question; it’s a fact.

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CSIRO manipulate assumptions to make wind and solar look cheap

Politicians often point to a CSIRO document called GenCost22 that claims wind and solar are the cheapest forms of energy. In reality however, their model has more holes than a block of Swiss cheese.
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Net-Zero means strip mining the sea floor for rare earths

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The Earth simply doesn’t have enough of the rare earth materials used in batteries and net-zero products to reach net-zero.

That’s even when you take into account the materials gained from strip mining the ocean floor and covering the surrounding ecosystem in silt.

One Nation supports real environmental protection, not the environmental destruction the UN net-zero is pushing.

Transcript

Unreliable, weather-dependent solar and wind power has put a price tag on our oceans. The phrase ‘blue economy’ is used to soften the ugly truth that, to achieve Australia’s transition to net zero, the world’s oceans must be strip-mined for rare-earth minerals. Batteries, solar panels and wind turbines are produced in China, in part using materials that companies, mostly Chinese, mine from the sea floor. Polymetallic nodules needed for solar panels, wind turbines and batteries lay along active volcanic rifts mostly found on the seabed. Giant vacuums suck up the seabed ecosystem to bury and choke the surrounding area in a thick layer of silt. Animals, eggs, sediment, plants—everything is taken off the seabed.

A Greenpeace research fellow, distressed with what was being done, said:

In all cases, seabed mining will, by its very nature, destroy species and habitats within the mining zones. There is no justification for a ‘gold rush’ to mine the seabed …

International waters, particularly in the Pacific, contain more value than the combined mineral wealth of Earth’s continents.

The Pacific is ground zero for this green rush, with China holding the majority of licences that the United Nations International Seabed Authority handed out. The UN International Seabed Authority supports undersea mining because it aligns with the UN’s 2030 so-called—and bogus— Sustainable Development Goals. The former head of the Office of Environmental Management and Mineral Resources at the UN International Seabed Authority is on record saying that the UN International Seabed Authority is ‘not fit to regulate any activity in international waters’ in part due to a perceived conflict of interest with mining giants. Corporations are in control, and, on behalf of those corporations, climate warriors are destroying everything they touch. Explain that to our children. We are one community, we are one nation, and we want our oceans protected from crazy climate warriors.

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Albanese pouring fuel on the cost of living fire

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The cost of everything is going up, but the Albanese Labor government is pouring more fuel on the fire by tipping billions into policies that will make electricity prices even higher. With more wind and solar in the grid than ever before power bills have never been higher. Time to give up on this pipe dream.

Transcript

President the Albanese Government’s behaviour goes well beyond a broken election promise to give cost-of-living relief. The Government is actively making inflation worse.

The inflation rate is 8% and will remain at 8% into the future, on the back of increases to energy prices. Electricity, gas, diesel and petrol are all inputs into every corner of our economy.

Forcing energy prices up to appease the sky god of warming will force up input costs right across our economy and lead to more inflation.

Weather-dependent solar and wind power will never provide baseload power. Doubling down on more solar and wind, before the added cost of changing out every wind turbine and solar panel with new ones before we even get to 2050 will lead to more inflation.

Taxpayers pay for these things twice: once in taxpayer subsidies to wind and solar and through higher inflation. Energy inflation.

Not only do we have a lack of wage rises, we have a lack of wages. Businesses are closing all over Australia as inflation wreaks havoc in the productive economy and energy costs drive manufacturing overseas.

This Government has no answers. We have just seen a child care bill that gives handouts to millionaires but fails to create a single job.

Failing to use government policy to create jobs while allowing 220,000 new migrants into Australia every year will create a pool of unemployed, resulting in reduced market power for labour. That can only mean lower wages, even before losing 8% a year off their pay packet through inflation.

One Nation believe the way to break the inflation cycle is a comprehensive root and branch review of the taxation system, to return bracket creep to wage earners while forcing big business, especially foreign corporations to pay their fair share.

Queensland Labor’s Health Department still mandates COVID injections for health professionals. Injection mandates must be abolished now. Let anyone who wants to work, work.

We are one community, one nation and Labor are a threat to breadwinner jobs.

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Climate talk-fest not coming to Australia is a win!

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If Climate Change talk-fest COP doesn’t want to come to Australia that’s their loss. We’ll keep our abundant protein-rich red meat, delicious range of seafood, cheap and reliable coal-fired power, huge gas reserves and efficient petrol and diesel cars. Let COP eat their bugs in the dark while they wait for their electric vehicles to charge.

Transcript

Great news, Vanuatu still exists.

Experts told us it would now be underwater due to global warming and rising sea levels. Just like Al Gore forecast Mount Kilimanjaro would have no snow by 2016.

How many islands has Vanuatu lost due to rising sea levels? None. Mount Kilimanjaro is still topped with icy white powder.

Maybe that’s why it’s now called climate change instead of global warming?

I thank the Australian Greens for this breaking news that Vanuatu’s climate minister would only back Australia’s bid to host the 2026 Conference Of Parties, COP, if Australia doesn’t commit to any new coal or gas projects.

With that headline the solution is clear.

Australia must immediately fund and build as many coal and gas projects as humanly possible so there’s no chance we’ll have to host the expensive UN-WEF talk fest for climate elites, the 2026 COP.

What is the COP?

The UN’s Conference Of Parties involves millionaires, billionaires and politicians bouncing around the world in fuel-guzzling private jets to luxurious locations.

Gorging themselves on prime beef while preaching to we lowly peasants to reduce our carbon dioxide footprint, stop flying, stop driving and stop eating red meat.

If the 2026 COP was hosted in Australia, taxpayers would be forking out for the UN’s globalist elite talk fest.

We’d be paying for them to tell us to destroy our energy grid and commit economic suicide to appease the sun gods.

If COP doesn’t want to come to Australia that’s their loss. We’ll keep our abundant protein-rich red meat, delicious range of seafood, cheap and reliable coal-fired power, huge gas reserves and efficient petrol and diesel cars.

Let COP eat their bugs in the dark while waiting for their electric vehicles to charge.

We have one flag. We are one community. We are one nation.

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Wind turbines are environmental vandals

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I remember when greenies hugged trees. Now greenies chop down trees and hug manufactured wind turbines made of concrete, steel, fibreglass and gearbox oil. 40 million tonnes of wind turbine blades destined for landfill by 2050. Wind power isn’t renewable.

Transcript

There’s nothing more galling than the sight of a 100 metre wind turbine slumped over. A smouldering aluminium & concrete corpse testament to wind power’s stupidity.

Even if a wind turbine fibreglass blade makes it through a 12 year operating life, the blade is still a global waste catastrophe.

Every year, Europe already adds 2 million blades filling landfills.

At the same time that we declared plastic straws an environmental sin, our beautiful planet has 40 million tonnes of wind turbine blades destined for landfill by 2050.

Every blade of every wind turbine installed to 2030 will be in a landfill by 2050.

So-called renewables need to be renewed every 10-15 years.

We’re not building our net-zero, nature-dependent generation once. We’re doing it twice over. Or three times. With all the waste this will bring.

This is environmental vandalism, killing the environment in the name of saving it.

I remember when greenies hugged trees. Now greenies hug manufactured goods composed of concrete, steel, fibreglass and gearbox oil. Greenies are resource hogs.

Recycling wind turbine blades is not impossible. It just takes a huge amount of energy for which coal is the optimum fuel. That’s why, without affordable coal energy, wind turbine blades and solar panels are dumped not recycled.

German wind farms kill 100,000 birds a year and unlike those killed in cities, these birds tend to be endangered species due to the location of turbines.

New model turbines are approaching 240 metres in height with blades close to 120 metres.

That will need a big hole to bury.

This is not ‘free’ energy and it certainly is not ‘renewable’.

Governments should not ‘force’ a technological transition. If wind technology was any good it would not be reliant on subsidies of $500,000 per turbine per year.

Real transitions – those that serve to benefit our community – happen naturally through market forces because they have natural economic or social advantages that meet people’s real needs.

We are one community, we are one nation and the United Nations & World Economic Forum’s net-zero is environmental vandalism.

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