Is private renewable energy investment a mistake in Australia? – Is it good?

Essay by Eric Worrall

Victorian Premier Dan Andrews reinvigorated the state’s electricity commission, to develop renewable opportunities and facilitate coal phase-out by 2035.

‘Shocked’: Andrews nationalizes electricity

Angela Macdonald-Smith, Patrick Durkin and Colin Packham
October 20, 2022 – 11:12 am

Victorian Premier Daniel Andrews’ plan to “return” the government-owned State Electricity Commission to reverse the decades-long process of privatizing Australia’s energy market will chill heads. private equity and hurt investors and ordinary workers, the CEOs of Woodside Energy, Alinta Energy and the Australian Energy Council warned.

The state Labor Government says it will spend $1 billion developing its own renewable energy assets, as it unveils potentially tough new emissions targets coal power generation end state in 2035 – earlier than expected. The state will invest directly to control renewable energy projects, including wind and solar, with an expected focus on ambitious offshore wind targets.

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The Prime Minister said that the revived State Electricity Commission (SEC) would “consider all options” including becoming a state-run energy retailer and would have a controlling stake in new energy project “With funding balances invested through like-minded companies like the super fund in the industry, who are focused on a fair future for Victorians.”

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The new targets have been welcomed by environmentalists and unions but Jeff Dimery, CEO of Alinta Energy, which owns the Loy Yang B coal power station in Victoria’s La Trobe Valley, is expected to close in 2047, said the move would force the plant to retire early. coal-fired power plants and costly jobs shocked his employees.

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Read more (with wall fee): https://www.afr.com/companies/energy/victoria-to-bring-back-state-ownership-of-energy-20221020-p5brci

Dan Andrews is the infamous head orders police to open fire on unarmed protesters by 2021 during a Covid lockdown rally.

The renewable energy target is absurd – Victoria has a lot of wind but doesn’t see much sun. Winds are not so reliable – Victoria regularly enjoys periods of days or even weeks with very little wind, at all times of the year.

So the question is why does Dan Andrews feel he has to intervene with the state’s direct investment capital? Is this just a political stunt, to appease the unions? Or is he having trouble attracting the level of private investment he wants?

On the surface, renewable investment looks good – all around $860 million spent last financial year in Victoria. But that is still not enough to achieve Victoria’s ambitious regeneration goals.

Dan Andrews is facing an election on November 26, so it could be just a stunt, a ploy to shore up support from union workers who have missed out on the Once upon a time, when state government energy businesses were run by managers appointed by union-backed politicians, they were easily paid. workers in the public sector.

Or it could mean something else. In times of rising interest rates and a potential recession, people will be far more wary of putting money into new business ventures. And the renewable energy tax is not immune to government regulation when governments are short of money, as Spanish investors discovered in 2010. Victorians have had a taste of the government’s tariff arbitrariness, with a significant cut in the rooftop solar tax rate in July.

I think time will tell.

Correction (EW): h/t High betrayal – Elections take place on November 26, not November 2.