Energy dreams costing the earth

The former Queensland Labor government’s cavalier attitude towards the cost and feasibility of its multi-billion-dollar Pioneer-Burdekin pumped hydro energy plans raises some alarming questions that must not go unanswered. Chief among them is whether the same lax financial oversight and accountability extend to the renewable energy rollout more generally and nationally.

The Miles government spruiked what was supposed to be the world’s biggest pumped hydro project as the centrepiece of its energy transition plans. It said the project was the “only option” to guarantee certainty of Queenslanders’ power as the state transitioned to renewable energy.

But a report by the company set up to build the facility – released publicly only after Labor lost office – found the project always was commercially unviable. It would cost more than double its claimed $12bn price tag and could not be built in time to meet the state’s emission-reduction targets. The long-awaited Detailed Analytical Report by Queensland Hydro estimated the costs of the project at between $24.985bn and $27.67bn compared with the initial estimate of $12bn.

These are details that should have been known before the project was enthusiastically embraced by Labor and certainly before voters were asked to decide on who they wanted to handle the state’s energy future. The same can be said about the federal government’s Snowy 2.0 pumped hydro scheme, inherited from Malcolm Turnbull, where costs have blown out by billions of dollars and it is now being completed on a cost-plus basis with the federal government underwriting the risk.

Given the pumped hydro experience, how sure can taxpayers be that proper due diligence is being undertaken on planning for the thousands of additional kilometres of high-voltage transmission lines and forests of wind turbine projects that are set to industrialise the rural landscape from Cape York to Tasmania? What cost-benefit analysis has been undertaken on the billions being given away to research a hydrogen industry that by all accounts is getting smaller and further away? And what about offshore wind, where even proponents are admitting the future cost is uncertain but will be astronomically high?

What has been learned about the energy transition from evidence given to a Senate hearing last month is that bureaucrats are making their decisions on a very narrow basis. The assumption always is that a renewables-heavy approach is the only one to be considered. Claims it is the cheapest option rely on the fact no alternatives are being considered.

The common feature is governments that are overeager to provide taxpayer subsidies to push ahead with their ideologically driven energy dreams. Top of the list is the federal government’s capacity market in which project developers will be guaranteed a profit no matter how poorly aligned their vision turns out to be with reality. It all makes the current confected campaign against the cost and timeline for Peter Dutton’s nuclear plans look hypocritical.

The Coalition must do the numbers and let energy users and taxpayers know exactly what they are getting themselves into. But so must the renewables-obsessed Albanese government and state government leaders. The view behind the curtain of the Pioneer-Burdekin project is alarming. The fact it has become public only because of a change of government is perhaps the most terrifying fact of all.