Wind Power ‘Investors’ Cut & Run from Australia as Ponzi Scheme Implodes

Investor’s ‘hard earned’ goes up in smoke….

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STT has likened it to the great corporate Ponzi schemes, pointing out, just once or twice, that the wind industry is little more than the most recent and elaborate effort to fleece gullible investors, in a list that dates back to “corporate investment classics”, like the South-Sea Bubble and Dutch tulip mania.

In the wind industry, the scam is all about pitching bogus projected returns (based on overblown wind “forecasts”) (see our posts here and here and here and here); claiming that wind turbines will run for 25 years, without the need for so much as an oil change (see our posts here and here and here); and telling investors that massive government mandated subsidy schemes will outlast religion (see our posts here and here and here).

In Britain, Wind Prospect Group has stopped paying dividends to its bond holders and has prevented them from cashing them in to recover their capital outlay:

Got Money in the Great Wind Power Ponzi Scheme? Then, Grab it & Get Out Now!

In Australia, one of the wind industry’s BIG players – Pacific Hydro – managed to rack up an annual loss of $700 million, last year; in circumstances where the subsidy scheme – on which its profits depend – hadn’t changed at all (see our post here).

Also in Australia, so-called ‘community wind farm’ operators have taken thousands for dupes, with wild claims about whopping profits to be had – all while ‘saving the planet’, of course.

The most audacious of which is Simon Holmes a Court’s brainchild, Hepburn Wind. An outfit that has been pocketing hundreds of thousands in REC subsidies – for 2 clapped out Suzlon/REPower 2MW turbines speared into Leonard’s Hill in Victoria; using money initially siphoned from 1,900 gullible, greentard ‘investors’. That community calamity (see our post here) kicked off in 2011, but has yet to return a single cent to investors in that time. Helpfully, its website carries some candid comments about the likelihood that ‘investors’ will escape with more than their shirts, answering its own questions like:

Q: When will I receive a return from my investments?

We have braced for a protracted period of low energy and certificate prices. During this time it is our intention to continue to direct all free cash to paying down our bank loan. While this will push a financial return for members into the future, we hope that members will understand that in reducing our debt exposure we are protecting the long term interests of our members.

We recommend that members revisit our FY2014 annual report which included an explanation our early forecasts are unlikely to be met in the medium term. In the current environment it is likely to be a number of years before the co-operative is in a position to pay a return to members.

Q: What if I can’t wait for a return and need to sell my shares?

A small number of members have asked us if they can sell their shares. As set out in the offer document, shares in a co-operative are not listed on any exchange, therefore there is no simple process to buy and sell shares. In general, the sale process involves making a transfer between willing buyers and sellers. (While the co-operative is permitted to buy a number of shares each year, it is at the board’s discretion and the board has determined that the co-operative is not in a position to do so at this time.)

While we are not required to do so, we do try to help members (especially deceased estates) who need to sell their shares for whatever reason. We maintain a register of members wishing to sell shares and we help facilitate introductions to existing and prospective members wishing to buy shares. Importantly, members are free to find their own buyers at any time.

Whilst we have facilitated a number of share sales/transfers to new members and marketed the shares in our e-newsletter, it is worth noting that the process thus far has been slow and will likely continue to be slow under these policy conditions.

We have spoken to other co-operatives both within Australia and internationally and have found that share sales are not common in the sector. Most members buy in for the long term and we respectfully ask our members for patience as we ride out these mid-term challenges.

Asking members for “patience” is the hall-mark of every good Ponzi scheme – as the overblown, promised returns (surprise, surprise) fail to materialise; and the scheme’s organisers get ready to flee with the loot! Hepburn Wind could have added some gleeful touch to its baleful warnings, such as “don’t call us, we’ll call you”; or “the weather’s especially nice this time of year in [insert name of tropical paradise, with no Australian extradition treaty]”, say?

Simon Holmes a Court tells his ‘investors’: “please, just be patient”.

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At the big end of wind-town, boardrooms are filled with the same mix of confusion, fear and anxiety. However, with $billions rather than mere $millions of other people’s money at stake, commercial wind power outfits are simply cutting and running.

Beleaguered Indian fan maker, Senvion (aka REPower, aka Suzlon REPower, aka Suzlon) has just dropped its plans to spear 90 of these things into the Southern Tablelands of New South Wales at Rugby – 50 km north of Yass, 220 km southwest of Sydney. The social and economic disaster was well-down the planning track, having kicked-off in 2010 (see the NSW Planning Department’s website here). However, last week it simply withdrew its application. STT’s operatives tell us the reason given by Senvion (ie REPower) to the Planning Department for dropping the project was that it had “simply run out of money”.

Another wind power outfit, Kiwi owned Meridian, has also seen the writing on the wall; and is, therefore, packing its bags and heading back across the Tasman.

The Wind Industry: Always and Everywhere the Result of Massive & Endless Subsidies (Part 1)

The Wind Industry: Always and Everywhere the Result of Massive & Endless Subsidies (Part 2)

So much for all that hot air about these things being competitive with conventional generators – and the wildest claims of all about wind power actually being cheaper than coal-fired power.

Even the merest hint of a threat to either the colossal level – or essential permanence – of the $billions in subsidies – filched from power consumers and/or taxpayers and directed to wind power outfits – is enough to send them packing. Oh dear, how sad, never mind.

For the wind industry, the first cut is the deepest …