Continued subsidies for windmills needed to maintain international confidence

Infigen Energy took over the renewable part of the portfolio of assets held by the failed Babcock and Brown.  The firm has assets on its books at $1.2 billion, which are very largely dependent for their viability on the renewable requirements that force consumers to pay more than twice the worth of power from its windmills and solar facilities.

Although much of the risk of these non-viable plants would have been contracted out to other businesses, Infigen is reliant on continued favours to grow its business and continued subsidies to stay afloat.  The firm also has wind facilities in the US which have been hit by low prices there on the back of the gas bonanza brought by fracking and other measures that tap into unconventional gas.  Spineless administrations like that of Victoria have declared illegal mining and even exploration for unconventional gas in the face of baseless murmurs from green zealots that it might damage the water table.

Wind subsidies were once trumpeted as a bridge to a future where exotic forms of renewable energy would be displacing all that twentieth century dinosaur stuff from fossil fuels and nuclear.  The promoters are no longer so certain.

Infigen has “put on hold” its previous intent to sell some of its wind assets in the light of the policy uncertainty about the on-going availability of the subsidies and, not surprisingly, the firm’s CEO, Miles George, has promoted the case for them.  He has done so not, you must understand, simply to enrich his shareholders, but because to do otherwise will harm the nation.  You see, if governments stop shovelling out money to loser technologies, then there is that pesky “sovereign risk”.  According to Mr George, ($) “Foreign investors would be looking very closely at anything like that, that affected investments already made.”

So governments that said they would provide 15 years of subsidies can now bind their successors that far into the future? Not even the car factories got that lengthy a guarantee.  Moreover, in Spain, the government’s decision to terminate after 10 years subsidies that were previously guaranteed for 20 years has not been met with any notable outcry.

What was it somebody wrote connecting “scoundrels”, “last refuge” and “patriotism”?

This entry was posted in Uncategorized. Bookmark the permalink.

25 Responses to Continued subsidies for windmills needed to maintain international confidence

  1. james

    Continued subsidies for windmills needed to maintain international confidence

    In what exactly?

  2. MiltonG

    Don’t forget that many windfarms were financed and built before 2010 on the basis that MRET income would finish in 2020.

    Rudd’s massive expansion of MRET gave the owners a windfall extension of REC subsidies from 2021 through to 2030. There should be no qualms undoing this rip-off of consumers.

  3. H B Bear

    When your entire business model is a State sponsored, compulsory consumer shake-down operation I expect you spend a lot of time “managing” sovereign risk.

  4. nerblnob

    Continued subsidies for windmills needed to maintain international confidence

    In what exactly?

    In the gullibility of the Australian taxpayer, one of the few remaining milkable cash cows for the wandering windmill opportunist.

  5. brc

    It’s amazing how fast we have gne from ‘renewable is the future, windmills and solar will put power stations out of business’ to ‘please don’t cut off our subsidies or we will die’

    It’s about time we had a green-religion commenter come along and say ‘fossil fuels get more subsidies’.

    Give them a couple of years to get their business model in order, then pull all subsidies.

    It’s about time the coalition started talking about comparative spending. ‘we can either increase the education budget or we can pay infigen x00 million dollars. We can’t do both’

  6. Joe Goodacre

    Inconsistency with what subsidies we are throwing at windmills is a perfect amount of sovereign risk to me.

  7. .

    Good find Deadman. They are delusional twits.

  8. Bruce of Newcastle

    The Danes have been the most enthusiastic backers of Big Wind in the world. Now even they are pulling back:

    Denmark’s Energy Minister Rasmus Petersen Plans To Scrap New Windpark Projects, Citing High Electricity Costs!

    It was notable that Denmark’s wind capacity was so large that they cause the Swedes lots of problems, since they suck in Swedish hydro energy in to load level the fickle wind yield. And when the wind blows too hard the Danes had to export the excess energy to Sweden and other countries so their grid wouldn’t melt…so the Swedes charged them to take it. Its the only case I know where someone has to “pay” a negative electricity price.

    I’d say that Infigen is going to have a slight problem with their wind assets, as in redefinition of the assets as “liabilities” .

  9. oldmiseryguts

    Spineless administrations like that of Victoria ”

    Spot on. Is it Denis Ballieu or Ted Napthine in charge until the next election?

  10. Mater

    Spineless administrations like that of Victoria

    I would agree in most regards but they did introduce VC78 restricting the siting of these things. This caused massive head explosions amoungst said ‘green zealots’. To their credit, the Victorian Liberals have not backed off this policy even in the face of the typically vicious criticisms.

  11. gabrianga

    “Continued subsidies” like this list of Obama’s “support” of renewable energy?

    This man ,Obama, is too “generous” with taxpayer’s money just like the Rudd/Gillard wastrels
    .

    link

  12. Dan

    Excellent point brc.

    As it currently stands, the carbon tax is just a welfare payment to offset the tax. It’s a strange policy

  13. brc

    the carbon tax is just a welfare payment to offset the tax. It’s a strange policy

    It’s a reverse import duty which penalises national production but gives imports a free ride.
    It’s a massive money churn where, for the first 12 months, the tax cost $4 billion more than it collected- worse than even the monumentally stupid mining tax
    It does zero – ZERO – in terms of reducing actual emissions, except where businesses like smelters are closed and relocated to jurisdictions where higher actual pollution is created
    Even if it did work at reducing 5% of the 1.4% of emissions from Australia – it would not alter the climate of Australia or the planet, nor would it influence China, India or the US who produce the bulk of emissions, and particularly the Chinese and Indians, who produce the bulk of emissions growth.
    It’s trying to solve a problem based on modelled science which even the IPCC now admits the impact is several orders of magnitude less than previously modelled.

    It’s a destructive non-solution to a non-problem and has no redeeming benefits at all.

    For petes sake, the greens invented the policy. Is there no greater endorsement of it’s utter, utter stupidity creation of unintended adverse consequences?

    We have destroyed the competitive advantage of cheap energy for no benefit whatsoever. And it’s a hot mess that can never be properly unwound.

  14. Andrew

    Before the election: Abbott666 is Satan because he’s going to give taxpayers money to big business.
    After the election: Abbott666 is Satan because he might stop giving taxpayers money to Babcock Wind and has not responded to ALP calls to give more taxpayers money to more multinationals.

    And yet ~49% want to vote for the Senior Labor Figure??

  15. Mick of Brisbane

    Sovereign risk? My initial thoughts are that any real business would opine “Thank God the government has come to its senses. Now we can invest without being penalised to subsidise the lunacy.”

  16. hzhousewife

    Love to know how many $’s Industry Super Funds have invested.

  17. Demosthenes

    Its the only case I know where someone has to “pay” a negative electricity price.

    With the ructions in Germany’s electricity market, they’ve had some experience with that phenomenon.

  18. brc

    Infinigen EPS N/A – is that because no data or no E?

    Looks like a nice healthy downtrend since Sep 13. That’s what I like to see in all subsidy based businesses.

    I so hope all those green true believers loaded up in 2010, thinking they were finally indulging in Gaia-approved capitalism.

  19. .

    hzhousewife
    #1214516, posted on March 6, 2014 at 5:33 pm
    Love to know how many $’s Industry Super Funds have invested.

    They exist only to benefit da members!

  20. Major Elvis Newton

    Miles George is an interesting character.

    To better understand the motivation behind this archetype rentseeker it’s worthwhile going back and looking at the public filings of (then Bermuda-based) Babcock & Brown Wind Partners who ultimately became Infigen Energy Limited.

    In there you will find a compelling record of gross management incompetency, enormous and unaccountable financial waste and the wholesale destruction of hundreds of millions of dollars of shareholder value.

    And that’s just the good stuff.

    Particular attention should be paid to the economics surrounding the Capital Wind Farm; a project designed to never make money even with the benefit of generous taxpayer subsidies. The capital cost per mW is extraordinary when compared with other energy forms and even other wind farms.

    Then of course there’s the nearby Woodlawn Wind Farm, itself a monument to vanity, ego and opportunism.

    Make no mistake, when a self-serving opportunist like Miles George is squealing like a girly man at possible changes to the (taxpayer-sourced) renewable energy funding model, it’s not driven by any altruistic motives to save humankind from a fossil-fueled apocalypse, rather it is the pained cry of a an executive who plainly sees the impending derailment of his highly lucrative gravy train.

    Not to be outdone, Miles George has already sensed the winds of change (pun intended) with the mooted abolition of the carbon tax and likely changes to the RET and has signalled his intention to move into that other bastion of renewable energy efficiency: solar PV.

    In America.

    Lots of taxpayer cash to tap there during Obama’s final years in office…and not a Solyndra in sight.

  21. cohenite

    Its the only case I know where someone has to “pay” a negative electricity price.

    What goes around comes around; Spain is now taxing sunlight.

    Anyway I don’ now if this is a negative return or not but it is certainly one of the best renewable scams: producing solar power at night because the cost of pointing fossil fuel generated light on solar panels at night is economical because the cost of petrol is cheaper than the subsidy for the solar ‘power’.

  22. john constantine

    how do we guarantee that cash will be there to dismantle worn out windfarms at their end of life?. they can’t just be bulldozed,but full oh and s regulations need to be expensively followed. it is a monty that landholders somewhere will be the last billable entities left to pay when the shell companies left with the windfarms fold. make directors consultants and advisors liable for the costs of their scams?.

  23. nerblnob

    they can’t just be bulldozed

    They’d have big buried concrete foundation blocks as well.

    I know a few engineers who went over to “renewables” in the late 90s, believing (as most of us did, seduced by the hype) that this was the wave of the future. Also the oil business was pretty slow at the time. They’re all back in “fossil fuel” jobs now, having become severely disillusioned. (and the oil business picked up in about 2005) Some of them still dabble on a consultancy basis. The challenges , in gearing and bearings alone, to be overcome are huge (which the engineers enjoy) and almost unreported by the media which is mechanically illiterate and retains a wide-eyed uncritical view of anything labelled “green” .

Comments are closed.