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    Fossils in Arms: solar project slammed as white elephant, really a raging success

    It’s the war of a generation, fossil fuels and fossil media in a battle to the death against new energy and new media, and new media just landed another savage blow. Michael West on fossil fuel spruikers, fossil media and the Sandfire solar project.

    How they hate solar.

    On Tuesday this week, the Australian Financial Review went large with the story headlined, “How a big new solar farm became a stranded asset”. That evening, energy analyst Tim Buckley debunked the story on social media. This was not a stranded asset at all, Buckley pointed out. “Zero stranding … [financially] a brilliant success”.

    For those interested in the nitty-gritty, the discussion thread on LinkedIn is worth the read. The project in question is the DeGrussa solar project in outback WA. It secured funding in 2016 via renewable energy agency ARENA to generate clean energy for the Sandfire copper mine; for the term of that mine.

    And it did just that. Now the solar panels can be transported for use elsewhere. We publish Buckley’s post below. He, like many other experts in the energy sector tend to engage in more technical financial debates. The debate is over when it comes to the financial viability and the growth of wind and solar power. It has been for years … but …

    What is not over, and the point of this republication, is the ‘culture war’ between new and old energy which is played out daily in the press and is frankly misleading for most Australians, and for many politicians whose votes they crave. People tend to believe what they see in the media.

    For that reason, there is a generation of older Australians who read and watch the fossil media who are outraged about the demise of coal – this newfangled “not base-load power” solar boondoggle. “When the wind don’t blow and the sun don’t shine” blah blah. They are simply, relentlessly, misled by the financial press which is pro-fossil fuels. There is money in it for them. 

    That ‘ol stranded feeling

    This is also why you will see Tim Buckley, principal of Clean Energy Finance, and the leading coal and RE analyst in the country published in this journal from time to time, but so rarely ever in the AFR or The Australian. They won’t run him; he doesn’t suit the fossil agenda.

    In defence of the reporter who wrote the AFR piece, mining roundsman Peter Kerr, his story was tempered with “let’s hear from the other side too” reporting. It was not black and white. Yet readers often don’t get past the headlines; and reporters don’t write the headlines either. Or the ‘woff’, the write-off or introduction at the top of the story which follows the headline.

    In this instance, after the AFR’s tendentious headline came this woff: “A perfectly good solar farm will be dismantled in 2024 just seven years after its high-profile launch. Bureaucrats insist it was a good use of taxpayers’ money”.

    This bit is for journalism observers. The implication – indeed the aim – is that solar doesn’t really work. “Dismantled just seven years after” suggests failure. “High profile launch” intimates the project was over-spruiked, a dandy. And “Bureaucrats insist” makes the project’s government backers look defensive, in denial. It is of the genre, “he denied bashing that person”. Guilty! 

    All that, following the headline “big new solar farm” etc simply screams white elephant. As intended. Although to be fair to the editors also, they might not know what a stranded asset actually is, and the fact that those dastardly solar things were so way out in the desert … sounds kinda strandedy. I mean, anyone would feel stranded way out there yonder, wouldn’t they?  

    The Buckley riposte

    Is the Degussa Solar Project a Stranded Asset?

    The Australian Financial Review’s headline “How a big new solar farm became a stranded asset” is eye catching but entirely misunderstands the definition of a stranded asset.

    Lloyd’s of London states: “Stranded assets are defined as assets that have suffered from unanticipated or premature write-downs, devaluation or conversion to liabilities. In recent years, the issue of stranded assets caused by environmental factors, such as climate change and society’s attitudes towards it, has become increasingly high profile.”

    The 10.6MW solar and 6MW battery system were installed at the approaching end of life Degussa copper mine in 2015 with a 5.5 year life. That the mine went for 7 years meant the solar and BESS were fully depreciated before their usefulness expired. An asset written down to zero has no economic stranding what-so-ever (unless it is a massive open-cut coal mine with a $2bn unfunded rehabilitation liability) => Zero stranding!

    ARENA states: “The DeGrussa mine, owned by Sandfire Resources NL, will purchase the power under a 5.5 year power purchase agreement. The solar PV plant is integrated into the existing 19 MW diesel generator facility, which is owned by independent power producer, Kalgoorlie Power Systems. Single axis tracking and lithium ion battery storage allow more renewables to be used and will offset 5 million litres of diesel fuel pa. A detailed knowledge sharing plan has been developed to share operational data and information about the risks, diesel savings achieved and strategies to enable higher penetrations of renewables.” 

    Given Australia has gone on to become a world leader in both the solar and BESS means the $23m ARENA funding and $15m CEFC concession funding was a brilliant success, over-delivering in terms of the financials and project’s planned life and the learning by doing of this pilot scale world leading deployment are obvious.

    What should also be obvious is that Australia’s Jim Chalmers should cap and phase out the $9 billion annual diesel fuel rebate for mining giants. This is a headwind locking in continued reliance on subsidised, expensive, high emissions planet destroying imported diesel fuel that undermines our energy security and undermines the rapid deployment of zero emissions, domestic cheaper RE+BESS+diesel genset solutions.

    Photo above: Sanfire Resources DeGrussa solar project. Image: Sandfire
    Michael West Media
    https://www.michaelwest.com.au/

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