The Oz – tilting at windmills: Part 2

Here’s The Australian yesterday – jumping on the STT bandwagon about the latest skullduggery at the CEFC – where hundreds of millions of our dollars are being splashed around like the CEFC was handing out speeding tickets at the Bathurst 1000.


Tilting at expensive windmills
The Australian
31 May 2013

THE taxpayer-funded Clean Energy Finance Corporation, championed by the Greens and set up by the Gillard government to finance clean energy projects, is indignant about opposition claims it is providing low-cost, high-risk loans that no other financial institution would touch. Climate Change Minister Greg Combet also insists that the annual $2 billion in public money to be allocated to the corporation for five years under Labor is a $10bn “investment’.

If so, banks and other institutions would presumably have no problem in providing hundreds of millions of dollars in green loans should the Coalition win government and enact its promise to scrap the CEFC. In the meantime, with the election little more than 100 days away, it would make sense for the CEFC to desist from making the hundreds of millions of dollars in green loans it is set to provide between July 1 and September 14.

The CEFC is in “active discussions” with 50 projects seeking $2bn. From among them, it will attempt to pick potential winners, fulfilling its brief to fund “clean energy technologies and thereby contribute to reducing carbon emissions and cleaner energy”.

Unfortunately, experience shows that government or its agencies picking winners invariably produces losers, especially taxpayers whose money is lost if projects fail to produce the returns expected or, worse, turn out to be financial disasters. To date, renewable energy projects including solar panels and windmills have fallen far short of passing the cost-benefit test, producing heavily subsidised power at many times the cost of coal-generated electricity. Market intervention in the form of a government-backed investment fund is also likely to divert investment from other energy sources that might prove more viable.

The CEFC has been keen to emphasise that its “investment decisions are made on a rigorous commercial basis independent of government by a pre-eminent commercial board”. Given public and commercial demand for efficient, clean energy, there is no reason why technically innovative projects with strong commercial potential would not find investment backing. At a time of budget stringency, there is no justification in risking $2bn a year in public money on loans that would be better assessed by the private sector.
The Australian

Hands up STT readers, who is ready to lend money to Infigen?

Our favourite whipping boys are lining up with Pac Hydro, and all the other wind outlaws, to pocket a fat pile of cash – OUR CASH – that is, from their mates at the CEFC.

When The Australian talks about “high-risk loans” it is referring to the fact that the wind outlaws are not being called upon to provide any valuable security for these so-called “loans”.

You know “security”, like the mortgage you had to give the bank over your little patch so that it would lend to you.

“High risk” is a term that sits perfectly in a sentence with words such as “lending” and “Infigen” and “Babcock and Brown”.

These corporate cowboys have nothing of value to offer real banks, so they are lining up to fleece us instead.

Up until about November last year wind farm developers were signing power purchase agreements (PPAs) with retailers, as if there was no tomorrow.

But, as the wheels started to fall off the Green-Labor Alliance late last year; and it looked like Abbott had a fair chance of taking the title, the retailers baulked and haven’t signed a PPA since last Christmas.

The retailers might be greedy, but they aren’t stupid – none of them want to be left holding a pile of worthless RECs, come September.

Reputable banks were willing to lend to Infigen and the boys while they were signing PPAs, because that agreement provides a guaranteed stream of cash in future (it incorporates the net present value of a future stream of electricity sales and, more importantly, REC income).

The PPA itself was, therefore, viewed by commercial lenders as a reasonable form of security for credit extended to the developer holding the PPA.

But, as newly signed up PPAs are now as rare as the Tasmanian Tiger, Infigen, Pac Hydro and their “chancer” mates have nothing of value to offer the banks.

The only thing they hold is a “licence” to enter some poor sucker’s land in order to stick up their fans, and a dodgy planning consent – neither of which are worth the paper they are written on.

So, if you can’t borrow money in the marketplace, why not hit up the Australian taxpayer?

See you at the Rally, June 18, Parliament House, Canberra.


Delighted to hear the Coalition are
FINALLY getting my message.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.


  1. Noel Dean. says:

    The CEFC Sounds a bit like the Victorian Energy Network Corporation, being involved in making windfarms viable by calculating Victorian subsidies to the developers, so they would be viable up until June 2006, when it was disbanded.

    Guess what, one of these do gooders, working for up to 5 years at the VEN corporation (up until June 2006) ended up as general manager at the Waubra wind farm (also in June of 2006), with all the inside knowledge on how to get government subsides without complying to the operational noise compliance monitoring program and complaints procedure, as agreed to in their planning permit.

    Information in the media revealed that the Waubra windfarm was valued at $450 mil at commissioning. 2 years later it was valued at $300 mil. After $35 mil a year in electricity produced, one must ask, was it’s value really $450mill, or was $450 mil just used to get extra subsides?

    • How to make such Government grant accreditation systems independent of coercive interest? Obviously too much work for public administrators, as they are off looking for other jobs. Maybe an Ethics Council be asked to take up the evaluation role Noel? They would consider the long term value of such allocations on behalf of the community.


  1. […] unsecured loans which are, in effect, interest free) from the Clean Energy Finance Corporation (see our post here); the benefit of the mandatory Renewable Energy Target, which forces retailers to purchase wind […]

  2. […] STT readers will remember our reports on the CEFC shovelling out hundreds of millions of dollars to prop up wind power projects that legitimate financial institutions wouldn’t touch with a barge pole.  See our posts here and here and here. […]

  3. […] while back we covered the shenanigans at the CEFC in: The Oz – tilting at windmills: Part 2.  In that post The Australian talked about “high-risk loans”, referring to the fact that the […]

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