Vying to be a Boondoggle Superpower

Peter Smith15 Dec, 2023 4 Min Read
Yeah, right.

An offshore wind/green hydrogen project has been scrapped in Germany. "The once-pioneering Westküste 100 green hydrogen project was announced with much fanfare in 2019, with plans to build 30MW of electrolysis capacity at independent oil refinery Raffinerie Heide in northern Germany by 2025, before scaling it up to 700MW by 2030. But despite the German federal government approving €30m ($32.6m) in funding and giving the green light for construction in 2020 of what was supposed to be one of the world’s first large-scale renewable H2 projects, the €89m first phase has now been scrapped — after its development consortium had reportedly already spent €1m."

And here things looked so promising in August 2020: "The funding from the German Federal Ministry for Economic Affairs and Energy to the Westküste 100 project is a significant step forward for our hydrogen business." Thus spake Martin Neubert, Ørsted vice president. Amazingly, there is no report of the government funding being returned. Meanwhile, far from Germany, in Australia, Squadron Energy has canned plans to build a power station running on a blend of natural gas and green hydrogen at Port Kembla in New South Wales:

Squadron Energy's plans to build a gas-fired power station at Port Kembla have quietly been withdrawn despite the company insisting it remains committed to building a similar facility in the region. The company, which is owned by Andrew "Twiggy" Forrest, is in the process of building a terminal to import liquefied natural gas (LNG) on the east coast of Australia through the Wollongong port of Port Kembla.

The project's scoping report claimed the $1.3 billion dual-fuel power station would have the capability to run on a blend of 50 per cent natural gas and 50 per cent green hydrogen "should a local source of green hydrogen develop in the coming years". The scale of the project led to it being granted State Significant Infrastructure status by the NSW government.

There is no report of any return of the $30 million the project was awarded by the NSW state government in its 2021-2022 budget. Of course not.

Look! We're green-hydrogen robot monsters!

"Green hydrogen" is a siren song to governments in search of a green-energy nirvana. They have money to burn and ready takers. Australian fantasists see Australia becoming a green-hydrogen superpower. Numbers of countries share the delusion; though there can be only none. With a nod to Joni Mitchell, it’s part of the dreams and reckless schemes and ice cream castles in the air, which make up the forlorn pursuit of net zero.

A first point to make, which applies everywhere. Henceforward: no government money. No wind and solar eruptions. No humungous batteries. No grand green-hydrogen schemes. No electric cars. Full stop. No exceptions. The whole lot of it is the mother of all boondoggles. Only countries which have built enormous wealth on the back of fossil fuels could ever contemplate affording it. Take that for irony.

Yet, despite subsidies, when it comes to the brave new energy future, never in the history of government overpromising have so many predictions fallen foul of experience. Before the last election in May 2022, Australia’s prime minister, then opposition leader, promised ninety-seven times that household electricity prices would fall by a yearly $275 by 2025. They have since risen by at least twice that amount and more is on the way. Nothing like personal experience. This is the advice I received from my electricity supplier on September 5 this year, correcting an earlier advice: "We made an error on your recent rate change notice… We listed an increase of $287.48…for your electricity…over the next year. This should have been shown as $316.23." Oh joy! The boon of renewable energy.

The Australian government predicted that electric cars would reach 89 percent of new car sales by 2030. Au contraire, the federal transport department has just estimated that the number will be just 27 percent. How mortifying for the government. And this estimate too looks wildly overinflated. The first few percentage points come easily; 3 percent of new car sales in 2022. But once you run out of rich people, inner-suburban doctors’ wives, and upper-level employees of governments and government authorities, you need to convince the common man. Harder, as the overambitious car manufacturers are finding out.

Sorry, no sale.

The government maintains a prediction that 82 percent of electrical power will be delivered by renewables by 2030; from 32 percent, including hydro, in 2022. There is absolutely no chance of real life coinciding with this prediction; particularly as wind and solar require more and more uneconomic overbuilding for each percentage increase in their contribution to the electricity supply. (See “Beware of Dunkelflautes” in The Pipeline.) And, knowingly neglected, their contribution is very much an average; plummeting at times to zero or close to. Not grid friendly, to put it mildly.

Watch out for thwarted greenies in the guise of government ministers. In Australia they lash out with oodles of taxpayer largesse. Facing his dreams crashing about him, Australia’s obsessive minister for energy and climate change Chris Bowen has announced a fresh round of green-dream bottomless spending. Bottomless is the word. Even I am surprised, despite having lived through the blowing up of coal-power stations and mad schemes to export green electricity undersea to Singapore and to ship green hydrogen to the world. How much madder can it get? A lot madder.

Bowen has announced that the government will run tenders to build 32 gigawatts of wind, solar, and batteries and underwrite a minimum revenue to the winning carpetbaggers. Size this in an Australian context. It is huge. As a comparison, the existing coal fleet has a plated capacity of about 23 gigawatts, and contributed 47 percent to electricity generation in 2022. And the potential cost of this extravaganza? Bowen won’t say. For good reason. It’s an open-ended invitation to rort taxpayers. We in Australia might not be capable of being a green-hydrogen superpower but we are giving Bidenomics a run for its money in the boondoggle superpower stakes.

After a career in economics, banking and payment-systems management, Peter Smith now blogs on the topics of the day. He writes for Quadrant, Australia’s leading conservative online site and magazine. He has written Bad Economics, of which, he notes, there is much.


See All

Leave a Reply

Your email address will not be published. Required fields are marked *