Aidan Morrison

Researching energy and defence. Physics and data science background. Happy getting into the weeds.

[Aidan Morrison @FootnotesGuy]

This is the story of how a fund chaired by former Labor PM Julia Gillard acquired a wind farm project just six days before Labor Energy Minister Chris Bowen underwrote its future revenues with taxpayer money.

Today we've learned Julia's fund is trying to flip it. For a profit.

HMC Capital's 'Energy Transition Fund' rushed to acquire the Neoen Victoria portfolio. They hadn't even raised any money in their fund. They closed with almost a billion dollars worth of borrowed money and IOU's.

Less than a week later, Chris Bowen announced Kentbruck Wind Farm to be successful in the first round of the Capacity Investment Scheme. My rough calculations suggest they will receive something like a billion dollars from taxpayers (and maybe much more) over 15 years.

Sweet deal. A billion dollars of fancy financial monopoly money one week. A billion dollars of promised taxpayer dollars the next.

I want to emphasise that I have no evidence of anything illegal or improper taking place. Rather, I want to point out how odious and repugnant the official, proper, legal business of renewable energy has become.

Yesterday Chris Bowen announced he wanted to supersize the CIS subsidy scheme, yet again.

Today Ross Garnaut seemed to cheer this on, whilst pointing out "There are now virtually no new investment commitments for solar and wind generation that do not have CIS or other Government underwriting,"

What happened to a sense of propriety? Since when do we celebrate people rushing to put their snouts in the trough? Or rushing to fill the trough even higher?

Unlike the UK who publish a 'going rate' for technology subsidies, our renewables are subsidised through a secret tender process. Every project gets to ask for whatever revenue they want to proceed. @AEMO_Energy facilitates a secret beauty pageant, where they award points for things like indigenous participation or community engagement, alongside financial value.

And Chris Bowen makes the final call.

The bids remain secret. There's no cap to the pay-outs. Since AEMO is a private company, there is no scope for an FOI request, and AEMO aren't not subject to parliamentary oversight through Senate Estimates.

So no-one can ever prove an allegation that Bowen has bestowed special favour on a friend's project if that was what he did. But equally, he can never prove that he selected strictly according to merit. We are just expected to trust the black-box of Bowen's subsidies.

So I'm going to say out loud, with full voice, that I hope everyone can agree on:

If this is what the future of 'clean energy' looks like in Australia, it looks absolutely FILTHY.

Any firm that talks about ESG seriously should start taking the "G" a bit more seriously and steer clear of projects that thrust their snouts into Bowen's hopelessly opaque, bottomless trough of government funds.

Or at the very least, purge their boards and senior leadership of all the former Labor staffers, donors, and industry lobbyists who have had a hand in designing the trough, and filling it up.

The reality is that there are no natural profits to be made in generating renewable electricity in Australia.

Every dollar of profit in this industry is really a cheque signed by a politician, with Chris Bowen signing all the biggest cheques, worth untold billions, in the next three years.

It's all legal. It's all official. And it's absolutely obscene.
Mega-thread below.
(It'll come in stages)
1/

[Aidan Morrison @FootnotesGuy]

I had a great chat with Ben and Doomberg last night. I would definitely recommend listening!

[Ben Beattie @EnergyWrapAU]

The Baseload Podcast Episode 38 - with Doomberg and Aidan Morrison @FootnotesGuy

https://t.co/Cz60u7ObzD

[Aidan Morrison @FootnotesGuy]

Here’s my full take on the origin of AUKUS.

[Aidan Morrison @QuixoticQuant]

I'm proud of my first video. But it's long, and deserves a 🧵to explain why it's worth an hour of your time.

It's about the most audacious bait-and-switch sales ploy attempted in modern military history. Which almost worked... 1/
https://t.co/M1lKGpNPh5

[Aidan Morrison @FootnotesGuy]

This is beyond weird.

I’m a fan of nuclear subs. But the current AUKUS deal, to lease American then buy British, to build in Aus, is so ridiculous, no review is needed to cancel it.

So if you want a review for political cover… why do one that no-one will take seriously?

Garret’s anti-nuclear activism is his only abiding credential going into this. What are the others? Pink Batts?

It just screams that Albo is determined to scotch AUKUS, and his chosen method of doing it is to reincarnate a golden age of anti-nuclear activism by reviving an ageing rocker who has had an ungainly excursion into Labor politics to deliver the hammer-blow.

Don’t get me wrong, AUKUS should be abandoned in its current form.

It was only ever a fig-leaf to cover the cancellation of the French subs deal, with just the weakest of plans-to-have-a-plan for a nuclear alternative.

Nuclear submarines could be a good long-term pursuit to replace hydrocarbon alternatives. Like civilian nuclear power.

But both of them lead to disaster if done in a rush. And now the acrobatic contortions required to make this procurement path look plausible are just insane.

We should strike a new deal with just the Americans, if they’ll make one. And stop handing them billions for their industry on their land while we spend billions building their bases on our land, which is all the current AUKUS amounts to.

The British military, industry, economy, polity, is in such a state, I just can’t see how they can be regarded as a party that we divert towards for the very long-term enterprise of building and running nuclear subs.

And we’ll need a new generation of diesel-electric subs to bridge the gap. They need not be extremely large and expensive. Just lethal in the Archipelago. Just like we’ll need another generation of coal power, even if the plan is to shift to nuclear.

So what’s with this review? The review that dismantle ls AUKUS for the right reasons, and sets our submarine and maritime strategy in a better direction doesn’t look at all like this.

[Bob @BobBurn97207272]

A known anti-American activist with a phobia about all things nuclear has been appointed to review a nuclear submarine deal with the US. What could go wrong??

[Aidan Morrison @FootnotesGuy]

Here's the CEO of Snowy Hydro claiming that the Integrated System Plan (ISP) requires 649GWh of storage, which Snowy 2.0 provides half of.

Acutally, the ISP has always treated Snowy 2.0 as a committed project. i.e., a sunk cost.

It's presence is imposed, not required.

[Aidan Morrison @FootnotesGuy]

@goodfoodgal Yep.

[Aidan Morrison @FootnotesGuy]

So Marinus Link is in a world of its own. This whole idea that we should string the whole grid together with giant high voltage transmission so that the ridiculous "it's always sunny somewhere" mantra becomes infinitesimally more true for the grid is just ridiculous. 4/4

[Aidan Morrison @FootnotesGuy]

My brow furrowed when I heard Clare Savage, Chair of the Regulator say she couldn't estimate the bill impact of Marinus Link, because it depended on concessional finance.

Usually that's a marginal impact.

But the CEFC has already committed MORE THAN 100% of the cost of the project in debt.

I guess that changes things. It means the terms of that government loan are everything. There is no other finance going into the project.

This makes an absolute mockery of the supposedly privately owned transmission system, with a regulatory process managing returns to private investors.

If the government is funding 100% from the tax-base, and making a political decision about how much of the cost to pass on to users, then surely you just have a state-owned company owning and building the assets right?

Well, as it happens, Marinus Link Pty Ltd actually is owned by three governments (VIC, TAS and Feds), it's just that only one is funding it. But by recycling it through CEFC as a 'loan' this will appear as a financial "asset" on federal government balance sheets, and not be counted as 'expenditure' in the Underlying Cash Balance.

Anyway, the confession is here in plain sight. The energy transition can't and won't be funded by private owners of regulated monopolies. It will be funded by taxpayers.

The regulator doesn't even know where the costs eventually will fall, and how much this will cost taxpayers or electricity users.

This is how disasters happen. When we commit to things when the cost implications simply aren't known or allocated.

[Aidan Morrison @FootnotesGuy]

And here are the other allocations.

Half a billion for biodiversity offsets for Central West Orana! Plus 750million for construction.

Still, that's only ~25% of the $5.5billion.

Likewise for VNI West and HumeLink, $2billion out of $12billion combined cost. 3/

[Aidan Morrison @FootnotesGuy]

Great piece from Greg Sheridan, who is now alert to the fact that the @AEMO_Energy ISP doesn't actually find the least cost energy system. This is an ideological capture of what should be trusted institutions.

https://t.co/LKtoWMVcGr

[Aidan Morrison @FootnotesGuy]

@Potstirrer111 This is due to the Cheaper Home Battery Scheme. The subsidy that was meant to cost $2.3 billion over 4 years, but blew through that in a something closer to 6 months.

What a win.

[Aidan Morrison @FootnotesGuy]

Here's the $14 billion calculation from the MYEFO papers. 2/2

https://t.co/9h8jLM21P6

[Aidan Morrison @FootnotesGuy]

My colleague Robert Carling, the public finance guru at CIS, decoded the MYEFO lines, with the upshot that the home battery program would have run to $14billion if not adjusted. Original estimate was $2.3bn.

"My interpretation of the budget papers is that the cost of the battery program over 4 years to 28/29 would have increased by $11.6 billion but they made changes which “saved” $6.7 billion leaving a net increase of $4.9 billion from the previous estimate. And the total cost of the program over 4 years is now put at $7.2 billion. This means that the original estimate was $2.3 billion."

[Aidan Morrison @FootnotesGuy]

My goodness... Imagine opening a scheme with no limits or volume caps like this.

They had just no idea. And they still have no idea. Another billion expansion, to 8.5billion for the scheme.

Remember the trajectory was to $14 billion. 1/

https://t.co/G95oaZeBx8

[Aidan Morrison @FootnotesGuy]

lol. I’ve been speaking about the economics of the energy transition at little town halls and bowling clubs around this area for the last few years.

I recognise a few voices here.

He really stepped in it, claiming this will push down prices! The farmers reaction 🤣👌

[katy 🌸 @KatyKray73]

The hi-vis worker is from TCV, the company behind the unwanted $11.4 BILLION power line that no farmer in this district asked for, wanted, or voted for.

They claim it’ll cut power bills by building the state’s most expensive transmission project ever. Yet a survey out last week says bills are set to climb dramatically over the next decade.

Meanwhile they’re leaving official notices under rocks, stuffing them in garbage bags, and posting them to relatives dead for over 60 years. Absolute incompetence.

Hard times ahead for farmers.

Sign the petition if you haven’t:
https://t.co/cYz1qjaOmR

[Aidan Morrison @FootnotesGuy]

The description of what the ISP shows given by Matthew Brine in response to Senator Whitten is incorrect, and he knows it.

He’s forced to confess later in the day by Senator @mattjcan .

The ISP can’t find the least cost replacement, because it’s constrained to renewables.

[Senator Whitten @SenatorTWhitten]

When the wind doesn't blow and the sun isn't shining wind turbines and solar farms do not produce energy.
When they do, the transmission lines can't carry the excess power.
And taxpayers are paying for this intermittent energy.

[Aidan Morrison @FootnotesGuy]

@LawleyEnergy @ryan_cropp This is a subtle but really important point. The idea that lots of little pieces just scale up and play nice might hold. Really big implications.

[Aidan Morrison @FootnotesGuy]

Oh look... AEMO requesting a new rule change to make it quicker and easier to curtail renewables when there's too much at a connection point for the network to handle.

Ping @ryan_cropp and any other journalist covering the energy transition. 1/

[Aidan Morrison @FootnotesGuy]

Of course, this has just been published today, the same day as the Regulator's Default Market Offer comes out heralding minor price falls for electricity.

So energy journalists will no-doubt be occupied writing about the good news of the day, not this.

6/6

[Aidan Morrison @FootnotesGuy]

So now, they're quietly demanding the power to switch off more grid-scale renewables.

Because that's a lot more politically palatable than the "Emergency Backstop" powers they were asking for rooftop solar.

A predictable workaround. 5/

https://t.co/ejjErbeavK

[Aidan Morrison @FootnotesGuy]

It says this:

We need to be able to SWITCH OFF your solar. (This is called "Emergency Backstop".

If we can't do that we'll TRIP OFF your solar.

If we can't do that we'll BLACK OUT your whole suburb.

This is for 'Horizon 1'. I.e. right now. 4/