Queensland election: Labor’s renewables company CleanCo is yet to build a new project

The publicly owned renewable energy company created by Queensland’s Labor government six years ago is yet to construct a single project as delays on two pumped hydro projects threaten the state’s environmental targets.

Queensland Premier Steven Miles in Maryborough. Picture: Adam Head

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The publicly owned renewable energy company created by Queensland’s Labor government six years ago is yet to construct a single project as delays on two pumped hydro projects threaten the state’s environmental targets.

CleanCo was established by the Palaszczuk-Miles government in 2018, to fund and build state-owned renewable energy generation to help wean the resources-rich state off fossil fuels.

The company had since used taxpayer funding to prop up privately owned solar and wind projects through power purchasing agreements, and had taken control of existing state-owned assets including the Swanbank E combined gas-fired power station.

But it was yet to build a single new state-owned asset, and its key project, the 103-megawatt Karara Wind Farm planned for the Southern Downs, was paused indefinitely last year after connection delays.

CleanCo’s only other new renewable generation project on the books, the Moah Creek Wind Farm west of Rockhampton, is still in the “development phase”.

Sold to taxpayers in 2018 by then-premier Annastacia Palaszczuk and her deputy Jackie Trad as a company that would “build, construct, own and maintain renewable energy generation”, CleanCo was created after lobbying from the Electrical Trades Union to do more to secure public ownership and jobs for regional workers in the renewables sector.

A CleanCo spokeswoman said the state-owned company had supported more than one gigawatt of new renewable energy projects through its offtake agreements.

“These projects are now in operation or construction in Queensland,” the spokeswoman said. “CleanCo has a further 1GW of renewable projects under active development, and an additional 3GW in the late stages of evaluation.”

She said CleanCo’s initial focus was on supporting new renewables in the Queensland market through offtake agreements, and it was now prioritising new energy and storage projects through both offtake and equity investments.

As of June, 27 per cent of Queensland’s energy consumption was sourced from renewables, an increase of just 1 per cent in 12 months. Under laws passed in state parliament earlier this year, 50 per cent of the state’s energy consumption is required to be sourced from renewables by 2030; 70 per cent by 2032; and 80 per cent by 2035.

Labor is relying on two pumped hydro projects – Pioneer-Burdekin and Borumba – to enable it to dump coal-fired power by 2035 and reach its renewable energy and emission reduction targets.

Both projects are behind schedule, yet to secure environmental approvals and facing multibillion-dollar cost blowouts.

The Liberal National Party has vowed to axe the proposed Pioneer-Burdekin pumped-hydro project, near Mackay, and repeal renewable targets.

Leader David Crisafulli voted in favour of Labor’s goal to slash 75 per cent of carbon emissions by 2035, and supports the Borumba project, near Gympie.

He flagged plans to construct smaller pumped hydro projects to meet the state’s baseload power needs, but refused to say where they would be built, when they would be built or how much they were expected to cost.

“It is under way … we will allow the department to do their work,” he said.

Borumba would remain a state-owned asset under an LNP government, but Mr Crisafulli said there would be opportunity for partnerships with the private sector to deliver more pumped hydro projects to help the state meet its emission reduction targets.

“Of course, there’s going to be a desire for the private sector to be able to make a contribution, and the legislation allows that,” he said.

“The legislation says that there is an opportunity for investment in those smaller pumped hydros and there are many projects that are being put forward.”

Speaking from Rockhampton on Wednesday, Mr Miles said the state was still on track to meet its targets, and claimed the goal of 50 per cent renewable energy by 2030 would be met by 2028.

“That leaves me very confident about our 2032 target, our 2035 target, and of course, our net-zero by 2050, as well,” he said.

Mr Miles confirmed his government was still in the dark about how much its Pioneer-Burdekin project would cost after a detailed analytic report was delayed until after the state election.

“Without the latest (information), the updated cost I have is $12bn,” Mr Miles said.

“We are awaiting a more detailed design before understanding if there are further costs.

“What you get with pumped hydro projects is they do typically have very high upfront capital costs, but they deliver very, very cheap power, 24/7, forever. That’s what makes them the best-value storage.”

Mr Miles conceded earlier this year that the initial $12bn estimate for the Pioneer-Burdekin project had likely blown out, and Energy Department director-general Paul Martyn told a budget estimates hearing in July that it could cost up to $24bn.

Sources who worked on the project told The Australian the figure could end up being even higher.

Mr Miles said despite the expected multibillion-dollar blowout, “large pumped hydros will be cheaper than an alternative of many, many smaller ones”.

“We also know that they will be cheaper than the two nuclear reactors that Peter Dutton wants to build, and we know that they will deliver cheap power for Queenslanders in the long term, and that’s why we support it,” he said.