Dark day for solar

The sun beats down upon the necks and arms of 200 people facing a brick building by the banks of Melbourne's Yarra River. The rays don't seem to worry the onlookers. The sun's power is, after all, the reason they're here.

The building houses Solar Systems, a company that was, until recently, developing a way to put sunlight to good use. A world leader in its field, the renewable energy start-up spent 15 years and $150 million designing and demonstrating a 154-megawatt solar farm in Mildura that would have produced electricity for 45,000 homes.

Then the dark day came. Short of funds to keep afloat, Solar Systems sank into receivership on 7 September. Now more than 100 jobs are gone and intellectual property decades in the making is at risk. So engineers and environmentalists have come to show support, the sun on their necks a reminder of what they stand to lose.

The protestors say the government is letting Solar Systems slip away — and with it the chance of a home-grown renewables sector. Energy and Resources Minister Peter Bachelor has distanced himself from the collapsed company. A spokesperson for his office told New Matilda that 'the Government supports the demonstration of technology, but is not in the business of giving loans to private companies with taxpayers' money'.

History begs to differ. Several federal and state governments have rescued large projects left floundering in financial straits.

In 2001, when the Australian Magnesium Corporation failed to raise enough equity for a $1.7 billion magnesium mine and smelter, the Federal Government agreed to guarantee a $100 million loan. The Queensland Government then launched its own lifeline, offering $100 million to secure dividend payments for investors.

Two years later the smelter had been dogged by cost blow-outs and was on the verge of collapse. Queensland's premier at the time, Peter Beattie, clung to his vision, saying 'this project is worth fighting for'.

Despite the cooler climes, southern politicians display the same hot-headed stubbornness to pursue a pet project. In June this year, the $3.5 to $4 billion Wonthaggi desalination plant stalled because the two bidding consortiums had trouble securing funds during the financial crisis.

When the new consortium AquaSure was announced, the government offered to be 'lender of last resort', effectively guaranteeing the plant's construction. Victorian Premier John Brumby had such faith in the project he hazarded the biggest public private partnership since the financial crisis.

More recently, Peter Bachelor trumpeted the construction of a 'Dual Gas' power station in Morwell. Closer inspection revealed it was actually a brown coal power station that fell through due to lack of investment, among other things. The Energy and Resources Minister had attempted to resurrect a failed project under a new name.

And let's not forget the Federal Government's madcap scheme to supplement the big four banks with a big fifth. The nicknamed 'Rudd bank' had a specific purpose: to finance commercial property projects, which is very much 'the business of giving loans to private companies with taxpayers' money'.

Solar Systems is not just a private company in need of funds, it's an important infrastructure project — a perfect candidate for a public private partnership. The technology is further along than that of the magnesium smelter or 'Dual Gas' power station, and the estimated cost of the solar farm is about an eighth of the desalination plant.

So why isn't it receiving the same financial guarantees and government support as these other ventures?

Solar was never really on the Victorian Government's agenda. A 2004 position paper titled 'The Greenhouse Challenge for Energy' states that 'To achieve its objectives [of reducing emissions], the Government will pursue policies which ... ensure the Latrobe Valley's long-term future'.

In other words, any green energy solution in Victoria must integrate coal.

Recent revelations in The Age back this theory. Premier Brumby is pressuring the Federal Government to secure extra emissions-trading compensation for Victoria's brown coal power stations. A consultant said, 'I think Brumby and a couple of his ministers do more lobbying than the industry'.

Brumby's plan to pay out big polluters will receive a friendly reception in Canberra. The Federal Government already hands the coal industry billions in taxpayer subsidies each year. In 2008 Australian Conservation Foundation executive director Don Henry said government-controlled funds were 'investing $47 in fossil fuels and uranium for every dollar they invest in renewable energy'.

Nowhere is this bias more apparent than in the Howard Government's Low Emissions Technology Demonstration Fund. Established to 'deliver long-term large-scale' greenhouse gas reductions, the fund now supports only fossil fuel technologies. Four of the five projects involve coal or gas, including a retrofit of the notoriously polluting Hazelwood power station. The fifth project is the Mildura solar farm, now likely to be shelved. Solar Systems was promised $125 million from state and federal governments but only received $500,000.

Our politicians suffer from a sort of carbon-induced myopia. Their obsession with digging up fossilised carbon blinds them to our nation's other abundant energy resource: sunlight.

It's no surprise that our 'sunburnt country' has some of the best conditions for solar power in the world. At the Solar Systems protest, that power is evident everywhere. It bounces off the building's empty windows. It glints on a locked metal gate. It rebounds off the roller doors, shut for the foreseeable future.

There's hope in those flashes. But while this building lies dormant, the sunlight outside — and the technology inside — is going to waste.

Greg FoysterGreg Foyster is a Melbourne-based writer. He has written about environmental issues for New Matilda, Crikey! and the Age and was the former environment columnist for Voiceworks magazine. The next Solar Systems rally will be at Parliament House on 30 October.

Topic tags: Greg Foyster, Solar Systems, solar energy, clean, green, john brumby, Australian Magnesium Corporation


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Existing comments

The craven acquiescence of our elected officers to the mighty mining industry is a case study of moral and intellectual failure best matched by their corresponding indulgence of those who would resume coastal wetland for McMansions.
David Arthur | 28 October 2009

Another Australian company, Enviromission, has taken its bat and ball to the USA where "EnviroMission US power purchase negotiations to deliver the first of two, 200 MW Solar Tower power stations have been given the green light from Southern California Public Power Authority".

this will supply power to California. Maybe we should ask Arnie to be our Prime Minister.
kenneth cooke | 28 October 2009

Who can I vote for? As a supporter of the rights of the unborn I don't want to vote for the Greens. But with the major parties full of hypocrites, liars and fools, who can I vote for?
Gavan Breen | 28 October 2009


I suggest first that if the rights of the unborn becomes an issue on the floor of parliament then it would come down to a "conscience vote" by the members of the major parties and not decided by party policies.

I suggest second that it may be a choice between the lessor of two evils. You either save the life of the unborn or you save the life of millions or billions of people already born (and the yet unborn) who would otherwise face death (or not be born) because the planet has become uninhabitable or because of collapse of civil society while we fight wars for disappearing resources like water and food.
Kenneth Cooke | 28 October 2009

It is interesting that none of these political 'clowns' will be around when the Climate reaches the tipping point and goes into free-fall with dire consequences for our children. I admit that I too will face this dilemma at the next election!
Gavin | 28 October 2009

I don't think Greg's example helps his case. Governments were not unreasonable with the Mildura project. Government grants of $125m (equal to 30% of the total investment) were awarded to it. 30% investment subsidy is very high for any project - it's pretty good and you have to draw a line somewhere, even for renewables. And these were grants - far better for the recipient than loans or loan guarantees which Greg seems to suggest the project should have got. Yet even with this substantial support the project still couldn't attract investment funds. All of which suggests it was way off being economic.
Investors (not government) decided not to put more funds in notwithstanding this govt support. Governments then quite properly did not continue with funding - it would have been a waste of taxpayers' funds.

The only other thing the Victorian Government might have done would have been to have a Gross Feed-In tariff for renewables applying across the board rather than the Net Feed-In tariff they have implemented.
Bill Frilay | 29 October 2009

If this company has been working for 15 years and has yet to produce sustainable and reliable power - and it is the storing, not the production that is the problem then why should public money be fed into it forever.
I agree also that car companies that are unviable should be allowed to die too. Subsidising jobs forever is unsustainable, too.

Anyhow, since carbon dioxide makes plants grow and is not a polutant, why not use the gas technology that is reliable and clean rather than something that is unreliable and still has not worked out how to provide power in the dark?
Rhyl Dearden | 29 October 2009

Solar energy is a start-up industry in australia, and the $125 million awarded to solar systems (of which only 2 million has actually been received) is nothing compared to the 9 billion dollars the government
subsidises the coal and oil industries per annum.

This $125 million (which came from the Low Emissions Technology Development Fund) looks a pittance when compared to the further $340 million granted from this fund all of which went to 'clean' coal technology. More infuriatingly, ALL of these 'clean' coal projects were purely for research- the Solar Systems funding was to build a fully functioning power station.

The 30% of funding, is, by world standards pretty pathetic. In countries like Germany and Spain its typical for governments to fund 60% of these projects. If Australia is serious about building a solar industry its imperative the government sets up the infrastructure for it to thrive. Do we get angry about the gov funding the construction of coal power stations? No. Then why on earth would you complain about them funding a solar power station?

Do a little research before getting up on your soap boxes!
maude | 30 October 2009

I support the concern expressed and positions taken by most of the commenters on this thread.

The Federal Government sees fit to subsidise the boondoggle of carbon geosequestration (ie burying CO2 as liquide doen deep wells) with around $500 million, while other countries are making big strides in solar technology. But here, yesterday's technology has political clout and tomorrow's does not.

In the race to head off climate catastrophe, biosequestration of carbon has potential. That involves passing industrial CO2 into algal ponds etc and using the algae to make biofuels and other products.

As the major part of household use of electricity is in water heating, all governments should be working to put solar water heaters onto every roof. But as electricity is the most flexible form of energy, supporting the development of solar generation should be a high government priority.

For more information on the foolishness of the geosequestration path see the summary of my contribution to the recent Senate Inquiry at http://noahsarc.wordpress.com/carbon-abatement-submission-condensed/
Ian MacDougall | 01 November 2009

For more information on this campaign, visit:

Sana | 02 November 2009

Excellent piece Greg.

You have summed up the situation perfectly.

The reason why Solar Systems has not flourished over the past 15 years is because Australian Governments have not put in place the long term strategic framework required for renewables to compete against the fossil fuel encumbants. Politicians are more interested in supplying short term residential capacity (eg: solar panel rebates), rather than long term capability (eg: utility scale technology like Solar Systems deploys). Large scale feed in tariffs, loan guarantees and solar tax breaks all give private investment the long term stability to confidently invest in renewables. The US, China and Western Europe have these policies in place, and are experiencing tremendous growth in the solar industry. Germany employs 50,000 in the solar industry alone - compared to less than 18,000 in the "precious" aluminium industry here in Australia that is treated like a protected child.

Solar Systems technology will definitely be bought - most likely from an overseas buyer who will steal yet another icon Australian invention. The sad truth is that we will probably be buying it back in about 5 years time at a huge mark up.
David Turner | 09 November 2009

I ask the same question! why is not the Govt. subsidising this so desperately needed industry in this driest of countries.
What about the Emirates, supplying adequate water in the desert, maintaining big cities, with desalination plants.
Can we learn from others?
Bernie Introna | 27 November 2009

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