Some of Australia’s largest solar projects are facing industrial action as the major Electrical Trades Union seeks protection for workers amid growing fears about the future of leading engineering and contracting company RCR Tomlinson.
The company, which took a massive write-down from cost over-runs at the Daydream and Hayman solar projects earlier this year, forcing a $100 million equity raising, sought a trading halt on Monday, and has now suspended its shares because of concerns about the future of its earnings in the current financial year.
A spokesman for the company played down fears that this could mean further write-downs on other solar projects that RCR is working on, but the union is taking no chances, particularly after more than 100 workers were sacked from the Wemen solar farm site in Victoria last month.
The Electrical Trades Union is threatening to stop work at five solar projects in Queensland contracted to RCR unless the respective project developers and owners provide a written guarantee about wages.
Those solar project site targeted for potential stop work orders include Haughton (Pacific Hydro), Emerald (Emerald Energy), Collinsville, Clermont (Wirsol) and Darling Downs (APA. Most of these sites are already producing some electricity, but are not yet complete.
RCR has also been working on the new Tesla big battery at the Gannawarra solar farm.It is not clear whether work there has been, or will be affected. Installation is largely complete, but commissioning is not.
“We want a commitment from developers, in writing, that they will continue to pay wages and that the conditions of the workers will be met,” Peter Ong, the secretary of the ETU’s Queensland and Northern Territory branches, told RenewEconomy.
The ETU’s concern about wages comes from the decision last month to sack more than 100 workers from the Wemen solar project in Victoria, which is also only partially complete. Ong says workers are owed money.
“We have got 130 workers out of pocket, and haven’t been paid for work they have done. Private contractors have since pulled out, so were are going to have to wait to see what is happening there.
“We are not going to have our workers working for free.”
RCR said in a stock exchange notice on Wednesday it wants its shares suspended, at least until next Tuesday (November 20) to give it more time to review “its earnings for FY19 and the associated consequences for its funding.”
RCR took a $57 million write down on the $315 million Daydream and Hayman projects, a result it blamed on “external” delays, and local issues such as bad ground conditions – which resulted in greater piling needs and costs – and poor weather.
Contractors and developers around the country have been hit by new conditions and rule changes that have forced them to spend more on their projects, sparking a range of disputes about who should bear the costs.
AEMO chief executive Audrey Zibelman conceded that there had been “hiccups” and delays at many solar and wind projects – sparking more fights over who should be responsible for lack of revenue.
Some project developers have been caught short by the sheer number of projects, which is causing concerns about system strength and network congestion, and causing some to suffer unexpected falls in “marginal loss factors”, which calculates how much of their production actually gets delivered to the end-user.
In some cases, such as Kiamal solar farm, developers have had to invest tens of millions in equipment such as synchronous condensers.
In other cases, revealed in the IPO documents of French renewable energy developer Neoen, delays in three NSW solar projects resulted in $22 million of damages.
There has been speculation that RCR Tomlinson has been caught up in further cost blow-outs at its solar projects, or in contract disputes over delays.
It grabbed a sizeable share of the solar market, but some questioned whether it could deliver projects at the cost quoted. It has since downplayed its interest in gaining new solar contracts, preferring instead “stable” markets such as railways, but this market is also facing tight conditions.
Its CEO has resigned and last week its CFO also quit, citing personal reasons.
RenewEconomy has sought comment from Wirsol, the owners of the Wemen project in Victoria, and which also owns the Clermont solar project in Queensland.
We have also sought comment from the developers of the other four Queensland solar projects targeted by the ETU for written undertakings on wages.
“The turmoil in RCR is not limited to workers entitlements there are also grave concerns for sub-contractors as well if the Mildura experience is anything to go by, in that scenario the local contractor has issued a stop to work until RCR’s future is decided,” Ong said.
The union has previously raised concerns about the use of back-payers and other unqualified labour in various solar projects around the country.
Wirsol earlier this week issued a statement highlighting the deliver of the Ganawarra solar farm, the Ganawarra battery and the Women solar farm (which it said was still being commissioned).
In that statement, RCR interim CEO Bruce James said: “RCR is proud to have delivered the Gannawarra and Wemen Solar Farm projects on time and has helped add to Wirsol’s Victorian energy projects. These projects continue RCR’s track record of delivering state of the art solar generation facilities.”
Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.