Trouble at mill!?

Is the RE bubble bursting? We know about the stranded assets in the Victorian countryside and there were warnings that serious problems would emerge when the penetration of  RE got past 15 or 20%.  This is not a good look.

One of the biggest contractors and constructors of large-scale solar farms in Australia, the listed constructing giant Downer Group, has signaled a dramatic exit from the solar business, saying it is too hard.

“We’re out of solar,” Downer CEO Grant Fenn told an analysts during a telephone briefing of the company’s half year earnings on Wednesday.

Fenn said the decision to withdraw from solar was disappointing, but inevitable given that the large-scale solar market had all but evaporated over the last 12 months.

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31 Responses to Trouble at mill!?

  1. Big_Nambas

    What he means is that there are no longer enough taxpayer supported subsidies in RE. RE is never going to be economically viable.

  2. Bruce in WA

    Ha …. ha, ha, ha, ha, ha, ha, ha, ha (snort) ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, (snigger) ha, ha, ha, ha, ha, ha, ha, ha …

  3. Colonel Bunty Golightly

    Once the slush money dries up the carpet baggers cast their eyes elsewhere!

  4. Nob

    I see they want government to spend more on the grid to accommodate solar.

  5. struth

    Fenn said the decision to withdraw from solar was disappointing, but inevitable given that the large-scale solar market had all but evaporated over the last 12 months.

    Government throwing taxpayer money at you is not a market, by means of subsidies to you directly or/and via rebating the customer.
    It is anything but a market, and dishonest language like this needs to be called out.

  6. Great news. Oh wait, renewables not working and we are not investing in coal powered. How is solar performing in past few days with the heavy rain ?

    Thanks Greens and weak politicians and the banks etc who have demonised coal which everybody else has no problem with.

    Wake up Australia.

  7. hzhousewife

    What a sensible chap.
    Maybe he’ll have a chat to some of his fellow CEO’s.

  8. Yarpos

    Giles in full spin mode. You can only suspend reality for so long, and then there it is yet again.

  9. Herodotus

    And they’re blaming government for the lack of direction!
    Where’s my tiny violin?

  10. Robber Baron

    “we’re gonna need a bigger subsidy”

  11. This is the kite flying before the backroom talks begin on how the states must allow an increase in electricity prices to ensure that renewables remain sustainable, and to ‘save all those Green jobs’.

  12. Iampeter

    the perverse impact of market rules designed to favour incumbent fossil fuel businesses.

    This line at RenewEconomy almost wasted a perfectly good cup of coffee.
    Good to remember that progressives are as completely out of touch as the conservatives that created this mess in the first place.

  13. NuThink

    Iampeter
    Good to remember that progressives are as completely out of touch as the conservatives that created this mess in the first place.

    Surely you know that conservatives conserve that which is working, so it cannot be conservatives that created this mess in the first place. More likely CINOs.

  14. Dr Faustus

    “Developers, contractors and bankers all struggle to come to terms with the risk of large power loss factors, grid stability problems, connection problems, and equipment performance issues,” Fenn said..

    Trivially predictable, elementary Power Systems 101 technical issues that have taken the RE industry by complete surprise – but which were pointed out in detail 15 years ago by the engineers then responsible for planning and operating the power system.

    This is deliberate self-harm, in the same sense as giving a bored toddler a pack of razor blades to play with.

    Australia has much more of this ahead. We passed the tipping point about five years ago: all unknowing, Australia is now committed to the decay of the national electricity system and a Mad Max energy future.

  15. liliana

    “Developers, contractors and bankers all struggle to come to terms with the risk of large power loss factors, grid stability problems, connection problems, and equipment performance issues,” Fenn said.

    There was a reason power station were built in or next to cities. What did they expect building kit out in the boonies and then expecting customers to pick up the tab for the inevitable losses and the transmission network needed to connect to the load hundreds of kms away. Also, what did they expect with garbage equipment made in china – they are lucky to get five years out of the panels before they are dumped (in landfill).

  16. Major Elvis Newton

    Parky seems perturbed that his renewable portfolio is in a pernicious and parlous predicament.

    Tissue?

  17. Elizabeth (Lizzie) Beare

    Government throwing taxpayer money at you is not a market, by means of subsidies to you directly or/and via rebating the customer.
    It is anything but a market, and dishonest language like this needs to be called out.

  18. Elizabeth (Lizzie) Beare

    To comment on the above quote, which jumped my computer’s gun, lol:

    I agree entirely with you, Struth.

    The first very solid Aussie hailstorm over a large-scale solar farm should show the practical fragility of this ‘market’. Let alone trying to feed it all long-distance into the national grid. Without subsidies it would have been written off very early as a bad idea useful only for limited small-scale purposes in remote areas.

  19. NuThink

    Maybe the Greens can take over where Downer Group could not make a go of the large scale solar, and put their money into it and NOT other peoples’ money. I think, but could be totally wrong, that voting for or giving money to the Greens is the modern version of purchasing indulgences.
    Just like good help is hard to find these days, so is good advice hard to find that does not just give the advice that the powers that be want to hear, but advice that they should hear.

  20. mem

    Gaming the so-called renewable energy system worldwide: Employ lobbyists to promote the green dream and lambaste coal, get in early and squeeze the RE subsidies, pay yourself and your colleagues big, big salaries, bag the early profits then, before the Ponzi falls over, blame problems on everyone else and move-on having wrecked the landscape and the once reliable and cheap electricity system. And the general population and politicians don’t even realize they have been totally ripped off. Meanwhile the same players move on to greener pastures.

  21. Rafe Champion

    Windwatch. At 10 the windmills were supplying 4% of demand in SE Australia.

    The sun was doing better but there is no point in sunpower during the day because we still need 100% capacity from conventional sources available to guarantee supply 24 hours a day.

    Double the cost of power (with more to come), destabilize the voltage, undermine security and still we need 100% conventional power, if we are allowed to have it.

  22. Aynsley Kellow

    Lizzie,
    The recent storm with hailstones in Canberra knocked out a few panels. The hurricane in Puerto Rico did likewise. The problem of leading edge erosion of wind turbines blades has been worse with offshore installations in Denmark, necessitating expensive replacement after about 12 years, well short of the 25 year claimed economic life. In both cases, composites that cannot be recycled and have to be disposed in landfill.

  23. Aynsley Kellow

    Correct Rafe.
    I think every politician who claims renewables are competitive in Australia should be introduced to the latest estimates for unsubsidised LCOE (in $US) provided each year for wind, solar and storage by Lazard – most recently November 2019
    They should then be reminded that the important measure is not LCOE, but system LCOE, because the heavy lifting is done by dispatchable, reliable plant whose economic value is destroyed by renewables. As Matt Canavan so accurately captured it, the dole bludger of the system.

  24. spr

    Struth:

    It is anything but a market, and dishonest language like this needs to be called out.

    It gets worse – there was a Fin editorial the other day where they claimed that taxes (“an explicit price on carbon”) were “market signals”.

    Aynsley Kellow: Transforming Power is a great book. Just wanted to add that.

  25. John A

    Herodotus #3321851, posted on February 13, 2020 at 6:11 am

    And they’re blaming government for the lack of direction!
    Where’s my tiny violin?

    Well, here it Tiny Tim. Will that have to do?

  26. Rafe Champion

    Jo Nova on the Corbett Report talking about the bushfires, nothing new but good for a foreign audience.

  27. Beachcomber

    Some more Tiny Tim.

    The ice-caps are melting.

    It’s a theme song for the Greens but the audience of kiddies seem to think it’s all a bit weird.

  28. Squirrel

    “Fenn said the decision to withdraw from solar was disappointing, but inevitable given that the large-scale solar market had all but evaporated over the last 12 months.”

    And yet (to state the utterly bleeding obvious), for some years now we have been told that the price of renewables, even with “firming” (what a handy weasel word) is lower than evil, satanic (etc.) coal – doesn’t quite add up.

  29. Professor Fred Lenin

    The UK plan to abolish petrol vehicles is bloody brilliant well thought out by clever people . The fact that the country doesnt generate enough electricityto do this is easily solved Simply use the petrol saved to power portable generators ,problem solved . B Doubles can carry their owni generators and fuel them from existing fuel tanks while having their compusory charge rests Geez there are some clever people about arent there .
    .

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