Citizens Electoral Council of Australia

Media Release Thursday, 27 October 2016

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 1800 636 432
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au

Financial sharks threaten Australia’s energy security

City of London and Wall Street financial sharks are responsible for the destruction of Australia’s energy security. They are among the biggest promoters of expensive, intermittent “green” energy, and their lobbying of governments to privatise electricity networks has effectively stolen assets that once belonged to all of us and served the common good.

Minister for the Environment and Energy Josh Frydenberg and his coalition partners have in recent weeks wailed over energy security. Following the South Australia blackout, Prime Minister Malcolm Turnbull said “a number of the state Labor Governments have over the years set priorities and renewable targets that are extremely aggressive, extremely unrealistic, and have paid little or no attention to energy security”. Crocodile tears from “Mr Goldman Sachs” Turnbull, who has long championed carbon trading, are not convincing. Nor are Frydenberg’s similar musings, while he continues to support the Renewable Energy Target that is forecast to double the number of wind farms nationwide. Not surprising really, considering Frydenberg was a director at Deutsche Bank, one of the world’s biggest speculators in “renewable” energy.

Basslink crisis

The failure of the Basslink undersea electricity cable from 20 December 2015 to 13 June 2016 set off a power crisis in Tasmania, cutting it off from Victoria’s mostly coal-fired power supply. At the time Tasmania’s dams were critically low, as Hydro Tasmania had sought to capitalise on carbon pricing and export more electricity to Victoria. Record low rainfall followed at the worst possible time, coinciding with the failure of Basslink. Singapore-based Keppel Infrastructure Trust owns Basslink and charges the Tasmanian Government-owned Hydro a massive facility fee. The 10 February Mercury reported that at last balance date Hydro still owed Basslink $864 million! Given what Hydro has outlaid in Basslink fees and associated finance since the cable became operational in 2006, the Tasmanian people could own it outright had the government developed it from the beginning.

The financial looting gets worse. Macquarie Bank sucked Hydro into a lucrative interest-rate insurance scheme in case interest rates rose. But rates did not rise. To date this financial trap has cost Hydro about $200 million. The exact figure is suppressed—“commercial in confidence”—but it’s estimated it will cost $540 million in total! Macquarie Bank has always been a City of London looting operation, deployed by its London parent Hill Samuel as a battering ram for the financial “reforms” imposed from Hawke and Keating onwards, to knock down every barrier that protected Australia’s economy from rampaging speculators.

We can expect some lawyers to be making a killing too, because Hydro is in a legal battle with Basslink. The Singaporean company claims the cable failure was a “force majeure” event, or unavoidable catastrophe. Hydro disagrees, and in addition has argued for years that Basslink has breached contract by refusing to deliver power at full capacity. Documents released under Rights to Information rules reveal Hydro racked up $3.7 million on arbitration between October 2012 and December 2013 alone. And in September it stopped paying Basslink the facility fee, sparking fears the interconnector will be switched off—again!

Overall, the strife at Hydro Tasmania is the result of management decisions that are based not on engineering but on financial criteria, and speculative ones at that.

The ‘renewable’ con

South Australia Premier Jay Weatherill reaffirmed (post blackout) his “renewable energy” target of 50 per cent by 2025; in Queensland, Annastacia Palaszczuk’s target is 50 per cent by 2030; in Victoria, Daniel Andrews’ target is 40 per cent by 2025. Such targets are a dream come true for investment bankers who know that anti-carbon legislation guarantees their profits. Therefore, it’s no surprise former Macquarie banker Colin Mugglestone chaired Premier Palaszczuk’s Renewable Energy Taskforce. And take a look at the Board and CEO of the Clean Energy Finance Corporation whose mission is to increase investment in a “carbon constrained world”: CEO Oliver Yates, executive director at Macquarie Bank for more than 10 years, being country head in the United States (1998-2004); Jillian Broadbent, former Reserve Bank board member; Paul Binsted, former managing director and joint CEO of Lazard in Australia (Lazard’s global operation is based in the British Crown’s tax haven of Bermuda) and vice chairman at Citigroup (1994-2003); and Anna Skarbek, who previously worked in investment banking in London, at Climate Change Capital, and was a Macquarie Bank executive.

Following the South Australia blackout, the state government, green groups and most media attacked the conclusion of engineers who blamed the state’s over-reliance on wind power, and instead heaped all of the blame on the storm. The engineers have been proven correct: a 19 October article from the Australian Financial Review titled “Wind farm failure during SA storm worse than thought” reported “an update into the investigation released on Wednesday found nine of the 13 wind farms online at the time did not ‘ride through’—or continue normal operations—after the six voltage disturbances, resulting in a loss of 445 megawatts of generation—130 megawatts more than originally thought.” By contrast, the gas-powered Torrens Island and Ladbroke Grove power stations only tripped at the last fraction of a second, well after most of the wind farms failed to supply power.

Old Labor greats would be rolling in their graves to see the modern Labor party deindustrialising our nation and dancing to the tune of the Money Power. To ensure energy security we could well take a lesson from China’s success with state-owned nuclear power companies. Currently 34 reactors are in operation and 20 are under construction. A further 178 reactors are planned or proposed, which will make China by far the world’s biggest nuclear generator. China’s prototype meltdown-proof pebble-bed reactor is nearly complete and is forecast to be in operation by November 2017. With national bank credit we won’t be fleeced by financial sharks and we could build infrastructure that actually works.

Click here for a free copy of the CEC’s New Citizen special report, “The Infrastructure Road to Recovery”, which includes plans for a 21st century nuclear power grid that can capitalise on Australia’s abundant reserves of nuclear fuel to power an industrial renaissance.

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