If anyone was expecting The Australian to prominently correct Tuesday’s fabricated front page lead story about a Saudi billionaire pocketing $300 million in subsidies from the Moree solar farm, then they would be mistaken.
Despite the fabrication being pointed out by Reneweconomy and senior figures in the clean energy industry, author David Crowe doubled down on his storyline on Wednesday, with yet another “exclusive”, this time titled “$180 million payday for 15 years of sunshine”.
Oops, the Saudi billionaire appears to have lost $120 million overnight – how careless of him – but Crowe’s newly confected outrage is based on multiplying the expected output with the contracted price sealed with Origin Energy in March 2016, and reported by The Australian at the time.
Perhaps he could have titled the story: “Saudi billionaire delivers cheap solar power to Australian consumers for 15 years.”
The latest article does not admit that its original claim that the Saudi billionaire was making off with $300 million of Australian renewable energy subsidies was “incorrect” until half way down the latest story.
But despite admitting that there was no ongoing subsidy for the solar farm, or indeed that the Saudi billionaire pocketed any subsidy at all, Crowe manages to find a National Senator John Williams, who complained that the Moree project was proof that subsidies were bad.
“They collect these subsidies from customers to sell their electricity cheap and send competitors broke,” the paper quoted Williams as saying.
This is not good enough. The Australian has also failed to correct the original story that Crowe based his article on, or the stream of “analysis” and commentary that was based on the same false premise.
Crowe’s story was also widely circulated. It got plenty of air-time on ABC’s Radio Sydney, was repeated as fact without question by Radio National’s Patricia Karvellas, was featured by Network 10 in their main TV news bulletin, and was hoorayed and amplified by far-right commentator Andrew Bolt, and quoted in other Murdoch press.
It was based almost entirely on a similar false claim by the paper’s economics writer Adam Creighton, writing about the same solar farm 10 days earlier, and who had earlier written a front page lead – The cost of going green, taxpayers hit with $60 billion bill – based on the same false assumption.
That sparked yet more commentary and analysis and has undoubtedly helped shape the conservative push against the RET and the proposed clean energy target, and it forms the basis of the threat by former prime minister Tony Abbott and others to “cross the floor” if any further subsidy is given to renewables.
Here is an indication of the sort of story that The Australia could write, and could claim an”exclusive” – at least for its own readers. The could title it: “Solar and wind cheaper than fossil fuels, even without subsidies”.
Australia’s stunning $8 billion boom in large scale wind and solar projects will likely be delivered with little or no effective subsidy because of the falling cost of the renewable energy technologies, which makes the wind and solar projects cheaper than the price Australian consumers are paying for coal power.
Almost all the new projects under construction or about to reach financial close have signed long term contracts with energy retailers or large energy consumers that include little or no value to the renewable energy certificates that each plant will generate.
That means that the projects are being delivered by Australian and international developers with little or no subsidy, in direct contrast to some estimates that put the total subsidies of the renewable energy target at $45 billion.
A prime example of these contracts are the sub $55/MWh contract price written by Origin Energy for the 530MW Stockyard Hill wind farm, and the $60/MWh contract written by AGL for the Silerton wind farm.
But nearly all new solar farms are being contracted for around $70/MWh, and because these prices are lower than the current wholesale prices in these markets, and include the renewable energy certificates, the effective subsidy is zero.
What is also significant is that the solar farms are actually getting paid less money than the coal generators that were built decades ago. New solar and wind is cheaper for consumers than old coal.
Imagine that. Such a story would made a mockery of the paper’s line that renewable energy subsidies are too generous. It may be true that a mechanism is required to encourage wind and solar to be built and contracted by the big retailers, but it is clear that the actual subsidy is already minimal.
Of course, to be able to publish that, the The Australian would have to admit not only that its story about the Saudi prince completely wrong, but also the story that prompted it – and a Murdoch “analysis” that put the total cost of subsidies from the renewable energy target at $45 billion.
Indeed, Crowe’s article draws heavily from an article written by Creighton on September 8, when he wrote:
With a capacity of just under 150,000 megawatt hours a year, the solar farm, up and running, will generate about $12.8m in revenue a year for the next few years, based on the current Large-scale Generation Certificates (LGC) price of $85.
Assuming that price falls to $60 on average between 2020 and 2030, the farm will provide a tidy $9m a year to the Saudi owners.
All up, over the 14 years, the $15.3m investment would have reaped about $140m for the owners, a return of more than 900 per cent, which, by the way, is quite a bit better than the typical super fund.
Like Crowe, Creighton appears to be unaware, or ignored, the fact that Moree signed a power purchase agreement that means its total revenue from Moree is around $85/MWh – so cheaper than the wholesale price of electricity and with zero value for the renewable energy certificates.
The PPA announcement was written up in The Australian itself in March, 2016, when it was announced by the Spanish company which then owned the project, which makes Crowe’s “exclusive” on Wednesday even more bizarre. Crowe and Creighton could have found that story by doing this.
Indeed, if Moree’s solar output had been sold “on market”, then the solar farm would have reaped around $98/MWh so far in 2016/17.
So the contract signed with Origin was actually good for consumers – the $85/MWh is a saving and cheaper than the average wholesale price. At current prices, that would deliver a saving of $41.5 million in energy costs over the life of the contract, and comprises a grand total of $0 for 2.3 million Renewable Energy Certificates.
But it appears that zero subsidy is still too much to acknowledge for the Murdoch media and the conservative agenda it amplifies.
What’s more, the original ARENA grant for Moree was awarded well before the Saudi billionaire bought the company that developed the project, FRV. Which means that the $300 million in subsidies advertised in the original story was completely made up.
But research is not the paper’s strong point. Creighton preceded his story about Moree by multiplying the output of all the wind and solar farms already built, and about to be constructed, by what he assumed would be the market price of LGCs.
He came up with a number of $45 billion for RET subsidies (and then added in the money allocated to the CEFC, ARENA and came up with a figure of $60 billion) which has been repeated in numerous articles in The Australian and elsewhere. But it is complete nonsense, and both Creighton stories stand uncorrected.