Chris Bowen’s scheme gives Beijing ability to pull plug on projects

A renewable energy company owned by the Chinese government has been provided taxpayer-funded support under Chris Bowen’s flagship Capacity Investment Scheme.

Climate Change and Energy Minister Chris Bowen. Picture: AFP

A renewable energy company controlled by the Chinese Government is receiving taxpayer-funded support under Chris Bowen’s flagship Capacity Investment Scheme, in a move likened to allowing Huawei to build Australia’s 5G network.

Through the CIS, taxpayers are underwriting the construction of a $120m large-scale battery at Clements Gap in South Australia, run by energy company Pacific Blue.

While it has an Australian executive team and local operations, Pacific Blue – which runs over a dozen wind, solar, and hydro projects across Australia – is wholly owned by the Chinese Government’s State Power Investment Corporation (SPIC).

According to global ratings agency Fitch, the Chinese Government’s State-Owned Supervision and Administration Commission has “broad control and oversight over SPIC’s operations, strategies and core management”.

SPIC is also an active participant in Chinese President Xi Jinping’s signature Belt and Road Initiative, which the United States Government has labelled an attempt to “create economic dependencies and coerce others”.

Peter Jennings, Director of Strategic Analysis Australia.

In an October 2023 interview with state-owned television network CGTN, SPIC President Li Baoqing said the Belt and Road Initiative and the “global expansion” of Chinese enterprises would “pave the way for a brighter future”.

“As a [state-owned] enterprise, first we must comply with policy guidance and use the relevant policy mechanisms of the BRI as guidance to ensure that international co-operation is on the right track”, he said.

Peter Jennings, Director of Strategic Analysis Australia, said the government has “learned nothing and remembers nothing” from the exclusion of Chinese telco Huawei from bidding for 5G contracts in 2018.

“Now we’re going through a repeat of this process but with the government completely ignoring the impact of allowing Chinese state owned companies to develop key parts of Australia’s critical electricity infrastructure”, Mr Jennings told The Sunday Telegraph.

“Chinese businesses and especially state owned enterprises, are governed by China’s national security laws which require those businesses to give China’s intelligence services access to their operations.”

“This is not simply about spying. It gives hostile intelligence services the capacity to install malware, kill switches, and other forms of technology designed to give China control over critical infrastructure during moments of tension.”

Coalition energy spokesman Dan Tehan.

The CIS – which underwrites investment in clean energy by providing “floor and ceiling” arrangements to renewable projects – has backed projects led by firms based in Spain, Denmark, Japan, and the Philippines.

The Sunday Telegraph has previously revealed Sydney-based renewable energy company Genaspi Energy outsourced work to multiple Chinese companies on its CIS-backed battery project in Bundey, South Australia.

Dan Tehan, the Coalition’s energy spokesman, told The Sunday Telegraph the government had “made a mess” of the energy transition.

“What checks and assurances can the Australian people be given that this [project] is in our national interest and in particular our national security interest?”

A spokesman for Pacific Blue said it was “incorrect to imply that the taxpayer will pay anything for projects approved under the Capacity Investment Scheme”.

“The Scheme simply offers a guaranteed wholesale floor price for the electricity generated and stored by the projects it supports, but when prices are above the set price, then revenue is shared with the Federal Government.”

Mr Bowen was contacted for comment.

Originally published as Chris Bowen’s scheme gives Beijing ability to pull plug on projects