Collapsed green energy construction company triggers Australian government crisis talks – Watts Up With That?
Essays by Eric Worrall
Green energy construction company destroyed by the transition to green energy? $10 billion of energy transition projects at risk
Clough’s collapse threatens $10 billion of energy transition projects
Angela Macdonald-Smith and Jenny Wiggins
December 6, 2022 – 6:45pmFederal Energy Secretary Chris Bowen is demanding emergency briefings from his department as the government seeks to limit the fallout from engineering contractor Clough’s collapse amid key projects Nearly $10 billion worth of Australia’s energy transition is at stake.
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Industry observers warn that Clough’s administration comes after a $350 million purchase agreement with Italy’s Webuild failedwill delay and possibly increase costs for projects by the Perth-based contractor.
These include some of Australia’s biggest projects, such as the $5.9 billion Snowy 2.0 storage project and the $3.3 billion Project EnergyConnect electrical interconnection project between South Australia and NSW. , as well as one of the few gas power plants under construction in the National Electricity Market.
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Following the rise of the Clough administration, Credit Suisse analyst Saul Kavonic said cost increases seem inevitable for at least some projects, including Snowy 2.0 and Waitsia, “with the risk of delays delay also increases”.
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Clough is cash bleeding due to unresolved financial claims about one-time, fixed-price contracts and delays in receiving so-called “critical payments”, which it has blame supply chain disruptions.
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Why are Australian supply chains so unreliable?
Part of the reason is that high energy prices caused by the decades-old push for green energy are hampering our manufacturing industry, which means a lot of what Australia used to produce now has to be imported. From August 2022;
Research highlights impact of energy crisis
August 26, 2022
Topics: Economic Research, Policy Advocacy
National employers association Ai Group today released new research detailing the impact of rising energy prices on a group of Australian producers.
Innes Willox, CEO of Ai Group said: “Many energy-intensive producers and manufacturing businesses are facing rising global energy prices.
“To understand how rising energy prices are affecting the industry, Ai Group sought feedback from businesses in the manufacturing sector and took it very seriously.
“More than half of the 78 producers contacted report that they have suffered significant negative impacts due to higher energy prices, with greater difficulties expected next year.
“Only one-sixth say they can accept significantly rising energy prices. For most, expenses must be spawned elsewhere on the balance sheet. This is a significant drag that undermines the ability of energy-intensive industries to invest in R&D or create jobs.
“It’s disturbing, about one in five people said they expected to cut production and/or jobs over the next twelve months due to high energy prices,Mr. Willox said.
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Read more: https://www.aigroup.com.au/news/media-centre/2022/Research-highlights-impact-of-energy-crisis/
WUWT recent report Comments by Reserve Bank of Australia Governor Philip Lowe “…One way to tackle inflation caused by a supply-side shock is to address supply…”. While Lowe stops advocating a particular policy response, one obvious way to tackle the supply problem would be to push back against regulatory punitive political attacks on affordable energy, such as such as Victoria’s “permanent” fracking ban, passed in 2021.
The death of a company building renewable energy with renewable energy has a certain narrative symmetry. But I don’t want to laugh. Thousands of people could be about to lose their jobs, just before Christmas.
None of this is likely to convince our zero-obsessed politicians to change course – perhaps they’re trying to figure out how to pump out the newly printed pension to the rescue. situation. Because subsidize and price limit it seems our current government must respond to solve the problems caused by their economic illiterate policies.
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