by Steve Hunter
By Jo Nova
Snowy 2.0 will stand as a monument to organized crime
Big Government is the ultimate racket. The costs have been hidden, the FOIs denied, the Unions are raking in the cash, and a foreign corporation is soaking in easy money. And in the end, the stored power is likely to be a horrible $200/MWh*, making it 6 times the price of brown coal plant power.
Malcolm Turnbull promised us it would cost $2b and take four years, and here we are, nine years later, with just $40 billion and three more years to go….
There is something in this project for every grifter. The incompetent management delays have added $8b in interest during construction. That will keep the Bankers happy. There are 3,000 extra workers nobody thought we’d need and they earn $250,000 each on average. And there is now $12 billion in interconnector high-voltage line costs. Like all “renewable” projects, the fuel is free but the cost to collect and distribute it burns like a magnesium flare.
Snowy Hydro 2.0 cost spirals to $42bn sparking calls for Royal Commission
By Tansy Harcourt, The Australian
The true cost of Snowy Hydro 2.0 has spiralled to $42bn and should be the subject of a Royal Commission into “one of the biggest disasters” in Australian infrastructure, economist Bruce Mountain and energy executive Ted Woodley said.
Major contractors on Australia’s flagship renewable energy project are simultaneously reaping profits at taxpayers’ expense under arrangements that guarantee payment irrespective of performance, while a series of prime ministers have maintained a wall of secrecy around the project.
The cost is now $1,500 per man, woman and child in the country. It’s like the government demanded every family of four pay $6,000 for something that doesn’t generate electricity, it just stores what wind and solar power make at the wrong time, so we can convert a useless product into something less useless.
This is pure subsidy money to wind and solar power. Each renewable project should be charged the fees to cover this, then see what the hourly charge for unreliable power really is.
Who is making money from Snowy?
Italian construction giant Webuild is in charge of the project and booked €4bn of revenue from Australia last year alone (a figure that included other projects). Australia is now a close-second in terms of revenue for Webuild behind Italy, and is its biggest pipeline going forward.
Webuild operates under a controversial cost-plus margin contract. Based on industry standards, that probably means it gets $1.20 for every $1 it spends, creating a perverse incentive to go big.
“That’s a wonderful business to have, isn’t it?” said a former insider.
One of Webuild’s delays was so that they could get worker accommodation built in Italy and sent to Australia. Because the Australian economy is not built around remote mining camps, right?
From the Herald Sun — Bruce Mountain is renewable fan, and even he hates it:
Snowy ‘Too Big to Fail’
Or we could have built four nuclear plants, South Korean style, and got 5GW of actual generation, with production of 40TWh a year. That’s 100 times as much energy, available when we need it. The big downside of course is that it’s a horror show for renewable investors and all the daft politicians who said wind and solar were “cheap”.
There are, of course, excellent reasons for secrecy
Responsible Members of Parliament clearly have a duty to keep these obscene costs a secret from taxpayers, adversaries, and anyone with a calculator. This isn’t about dodging accountability —it’s about protecting Australians from the harmful effects of understanding the astronomical numbers. Clearly releasing the truth suddenly would demoralize the nation, increasing rates of depression and suicide if people knew how crooked and inept our government really is. This is secrecy in the interests of public mental health.
Then there is the matter of commercial sensitivity. We don’t want foreign infrastructure firms to know how easy it is to screw absurd amounts of money out of Australia. They will all raise their quotes. If word got out that budgets are flexible, deadlines optional, and overruns practically a revenue stream, every bidder would adjust accordingly. Australia will never get a reasonable tender again.
Naturally national security is also at stake. If adversaries learned how effectively a single project can inflate costs and strain the grid, they might attempt to replicate the model. Why sabotage infrastructure when you can simply commission it?
Though in fairness, it’s hard to imagine how foreign spies could make the situation worse than the Labor party already has.
h/t , David Maddison and David E
*kWh fixed to MWh!