Strewth!

Unlike much of the rest of Australia, Tasmania places little reliance on fossil fuels for the generation of its electricity supplies. In 2018/19, some 90% of its electricity needs were generated by 30 hydro power stations. Although it does suffer from droughts from time to time, Tasmania normally receives fairly substantial rainfall, and the hydro schemes utilise water from six major river catchments. That’s quite an achievement, and it leaves me wondering why the decision has been made not to leave it at that, but instead to blight Tasmania’s landscape by building lots of wind farms to provide still more electricity, albeit on an expensive, subsidised and unreliable basis.

More than that, dating back to a joint venture agreement signed between the operator of all those hydro schemes (Hydro Tasmania) and Shenhua Group Corporation Limited, in 2014, Tasmanian wind energy schemes have increasingly been handed over to Chinese investors. For instance:

Woolnorth Wind Farm

This was the wind farm which was the subject of that initial JV agreement. Today it is is best described as a wind farm complex, and it comprises two wind farms – Bluff Point and Studland Bay – in the far north west of Tasmania. The joint venture is owned 25% by Hydro Tasmania and 75% by the Chinese. I say “the Chinese”, because, for example, Wikipedia’s pagei on this says in the main text that the Chinese 75% share is owned by Shenhua Group, while the side notes on the page say that the 75% owner is Guohua Energy Investment Co. Ltd. Internet searches suggest that there is a company called Shenhua Guohua Energy Investment Co Limited, so perhaps they’re the owner, and presumably they are indeed a subsidiary of Shenhua Group.

Either way, it’s almost certainly of academic interest, since (again according to Wikipediaii):

China Shenhua Energy Company Limited, also known as Shenhua, China Shenhua, or Shenhua Energy, is the largest state-owned coal mining enterprise in Mainland China, and in the world. It is a subsidiary of Shenhua Group. It mines, refines, and sells coal, and generates and sells electric power in the People’s Republic of China. It operates coal mines as well as an integrated railway network and a seaport that are primarily used to transport its coal. It also operates power plants in the PRC which are engaged in the generation and sales of coal-based power to provincial and regional electric companies. In the 2020 Forbes Global 2000, China Shenhua Energy was ranked as the 168th -largest public company in the world.

Not so green after all, then. And it gets worse – although Wikipedia’s page is rather out of date – we are also told:

In September 2009, Shenhua announced that over four years they will invest US$39.5 billion in coal to increase their production.

Cattle Hill Wind Farm

This is a wind farm with 48 turbines. It is owned by Goldwind Australia, a wholly-owned subsidiary of Xinjiang Goldwind Science & Technology Co. Ltd, which in turn has among its major shareholders (again according to Wikipedia) Hexie Health Insurance, China Three Gorges Renewables Group and the National Social Security Fund, all in turn Chinese state-controlled corporations.

Interestingly, Goldwind Australia’s website has a Power China logo on it.

According to the Australian Broadcasting Corporationiii:

Cattle Hill Windfarm (48): 20 per cent Chinese private wind farm Goldwind, 80 per cent state-owned enterprise Power China.

Maybe the Wikipedia page is out of date – the ABC article is dated 6th January 2021. Not that it matters much, since the ownership of all these Chinese companies and corporations ultimately traces back to the Chinese state. Still, a visit to Power China’s websiteiv is quite informative:

POWERCHINA RESOURCES LTD. (hereinafter referred to as “PCR”), a backbone holding subsidiary of Power Construction Corporation of China Ltd. (hereinafter referred to as “POWERCHINA”, Stock Code: 601699), was established on July 1st, 2012 in Beijing, China, with registered capital of 5.41 billion RMB.

PCR’s business scope covers concession of electric power projects, development of oil, non-ferrous metal and other mineral resources, real estate development, environmental conservation, investment in utilities and infrastructures, engineering and technical consulting services, import & export trading and overseas contracting.

Currently, PCR has 36 subsidiaries, 6 joint-stock companies, and 1 representative office in 16 countries and regions worldwide….

PCR has superior capability in capital operation and project development in electric power and mineral resource sector. Currently, Kamchay Hydroelectric BOT Project in Cambodia, Nam Ngum 5 Hydropower Project, Nam Ou River Basin Hydropower Project in Lao PDR (Phrase One),Upper Marsyangdi A Hydropower Station in Nepal,Port Qasim Coal-fired Power Plant in Pakistan, The Copper Cobalt Mining Project in D.R. Congo,Khanmouane Cement Plant in Laos are the projects in operation; Nam Ou River Basin Hydropower Project in Lao PDR (Phase Two), Bengkulu Coal-fired Power Station Plant in Indonesia, Barisal Coal-fired Power Station in Bangladesh and Wild Cattle Hill Wind Farm Project in Australia are the projects under construction. Meanwhile, a series of power and mineral projects in various countries, such as Cambodia, Laos, Nepal, Indonesia, Bangladesh, and Australia, are now being actively promoted.

The Port Qasim Coal-fired Power Plant in Pakistan gets a special mention:

The annual generation of Port Qasim coal-fired power plant set a new record

As of midnight on December 31, 2020, the annual generation of Port Qasim coal-fired power plant (the plant) reached 8.894 billion Kwh, completing 109.8% of the annual generation plan and setting it’s new record since the plant was put into operation.

According to the latest statistics of Pakistan National Transmission and Distribution Corporation, the total capacity of the plant in 2020 ranks first among the whole CPEC power energy projects.

Again, then, perhaps not so green.

Does it matter? Well, it might if you’re an Australian citizen or energy-user paying subsidies for all those wind turbines:

Subsidies

If I understand it correctly, renewable energy in Australia is subsidised by the Renewable Energy Target (RET). The Australian Parliament has produced a Quick Guide for those interested.v

The ‘Renewable Energy Target’ also refers to the legislated scheme that provides the mechanism for achieving the target through the creation and trading of renewable energy certificates. This certificate-trading scheme allows generators of renewable energy to earn additional income for the electricity that they generate, above the market price.

Sounds like a subsidy for renewable energy? That’s because it is. The Australian Energy Market Commission estimated around nine years ago that:

the RET will be responsible for between 3.6-5.2% of the average household’s electricity bill in 2013-14.

Later in 2015 the Australian Senate Committee Final Report on Wind Turbinesvi provided some more up-to-date information:

7.18 Effectively, therefore, the RET is a cross subsidy to the renewables sector. As the 2014 report into the Review of the RET stated:The RET has been successful in promoting additional generation from renewable sources, with renewable energy generation almost doubling from 2001 to 2013. This reflects the considerable cross subsidy that the RET delivers to owners of renewable energy power stations and small-scale systems, estimated to be about $9.4 billion over the same period.

7.22 If the marginal cost for a wind farm company to produce 1 MWh of energy is around $80, the RET at current prices offers a significant subsidy ($50 of the $80). In other words, at current REC prices, wind companies have only to raise $30 per MWh from the electricity itself.

That all sounds reasonably positive, doesn’t it? Well, it certainly does if you own a load of wind turbines. Not everyone sees it that way, however. Fast forward to 2021 for an alternative view from an anti-wind turbine pressure groupvii:

If the object was wrecking every last manufacturing, mineral processing and mining job, then Australia’s renewable energy policy has delivered on time and under budget.

Starting in 2001 with John Howard’s Renewable Energy Target (massively expanded by Kevin Rudd in 2009), the subsidies being squandered on intermittent wind and solar are now in the order of $7 billion, annually.

Twenty years ago, when it all began, Australian households and businesses enjoyed the world’s cheapest power prices. Now, they suffer among the world’s highest. With notionally wind and solar ‘powered’ South Australia suffering the highest retail power prices in the country, right up there with renewables obsessed Germany and Denmark.

Oh well, you can’t make an omelette without breaking eggs. And after all, these extra costs are all in a good cause, as the Australian Parliament’s Quick Guide makes clear:

The Renewable Energy Target is a Commonwealth Government scheme to increase the proportion of electricity generated in Australia from renewable sources, to reduce the emissions of greenhouse gases from electricity generation and to promote the development of a renewable energy industry in Australia.

The Law of Unintended Consequences

There’s just one problem. The aim was to reduce emissions of greenhouse gases by generating more electricity from renewable sources. However, the owners of the Tasmanian wind turbines, who receive the subsidies, are also the owners of coal-fired power stations around the world, who can use the subsidies to buy more coal to burn. I suppose the politicians thought that it was just as well that Australia sold lots of coal to China, (A$13.7Bn worth in 2019). At least some of the Australian taxpayers’ money might be “recycled”. What a shame, then, that in November 2020 China implemented a ban on clearing or discharging Australian coal, with immediate effect. Australian coal exports to China have subsequently plummeted, and China is now buying its coal from elsewhere (e.g. South Africa and Indonesia). It’s just as well that lots of other countries are happy to burn Australian coal, and sales to India and Brazil in particular have largely replaced the lost sales to China.viii A close shave for Australian coal. Strewth!

i https://en.wikipedia.org/wiki/Woolnorth_Wind_Farm

ii https://en.wikipedia.org/wiki/China_Shenhua_Energy

iii https://www.abc.net.au/news/2021-01-06/foreign-investment-in-tasmanian-wind-farms-raising-concerns/13036164

iv http://pr.powerchina.cn/djhten/s/2440-6078-15432.html

v https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1314/QG/RenewableEnergy

vi https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Wind_Turbines/Wind_Turbines/Final%20Report/c07

vii https://stopthesethings.com/2021/02/08/wrecking-ball-australias-fixation-with-subsidised-renewables-guarantees-economic-disaster/

viii https://www.hellenicshippingnews.com/australian-coal-exports-bounce-back-from-chinas-ban/

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August 5, 2021 at 03:04PM

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