With the AFP no longer investigating the incident, Angus Taylor appears to have got away with using a falsified document and inflated numbers to attack Sydney Lord Mayor Clover Moore.
Taylor has form in this arena. He’s also used questionable numbers in an attempt to destroy the wind industry.
It was July 2013 and Angus Taylor, making his run for parliament, was the star at an anti-windfarm rally hosted by 2GB’s Alan Jones.
Standing on the front lawn of parliament, Taylor gave a brutal assessment of wind power.
He’d seen communities in his nearby electorate of Hume “tear themselves to pieces, cousins versus cousins, brothers versus brothers” over hosting wind turbines on their farms.
But Taylor’s opposition to wind was driven not by emotion but by the cold hard numbers — the “massive subsidies” which he said the government would pay.
Each wind turbine “built today” would receive “half a million dollars or more of subsidies every year for its life”, Taylor said.
“By 2020, the impost on Australian electricity bills will amount to about $3 billion a year,” he warned.
“It will be like the proverbial boiled frog. No one will notice because slowly the water is getting warmer and warmer. Three billion dollars a year by 2020.”
Well, it’s 2020. Angus Taylor’s day has arrived. So how accurate were his numbers?
In short they are wildly wrong — by at least $3 billion.
Taylor’s bad numbers
The Clean Energy Council puts it plainly in its 2019 state-of-play annual report: “Clean energy investment does not need new subsidies…”
That is backed up by the latest figures covering 2019-2020 from a joint study by the CSIRO and Australia’s energy market operator (AMEO) which confirm that wind is clearly cheaper than coal or gas (or nuclear for that matter).
So what went wrong with Taylor’s numbers?
Charlie Prell, a pro-wind turbine farmer in Taylor’s electorate, still has the spreadsheet Taylor worked up to prove the massive subsidies demanded by wind turbines.
“It assumes that the cost of a renewable energy certificate will always be $85 (per megawatt hour),” Prell explained.
Prell accuses Taylor of being “disingenuous at best” with his numbers and says he told Taylor back in 2013 that his numbers didn’t stack up.
“Certificates are tradeable in the market. Prices change and it was predicted back then the cost would fall steeply. The current price is in the low-$20 range.”
Taylor’s claims of huge subsidies were based on an assumption that wind farms would continue to receive a subsidy of $50 to $85 per megawatt-hour via renewable energy certificates, up to 2020 and beyond.
This would be on top of revenue from the wholesale electricity market.
Tristan Edis, who tracks the market in renewable energy certificates as director of analysis at Green Energy Markets, told Inq that the prices Taylor built into his model have turned out to be completely off the mark.
“While certificate prices over 2016 to 2018 did reach the kind of high levels Taylor assumed, these high prices came about because investment in new projects dried up due to fears Tony Abbott would abolish the Renewable Energy Target (RET) scheme.”
“This resulted in a short-term shortage in renewable energy certificates and a spike in prices.”
Edis said that shortage was “pretty much behind us now”.
The price for a renewable energy certificate for 2020 compliance was now down to $28 compared to Angus Taylor’s estimate of $50-$85. “And it goes down from there,” Edis said, citing contract prices as low as $10 for renewable energy certificates for delivery in 2023.
A better guide to the cost of renewable energy was the long-term contract price being paid by power companies and major corporates for new projects.
These varied from the mid-$40’s per megawatt-hour up to between $50 and $65. By comparison the average wholesale electricity price over the last two years has been about $90.
“In many cases renewable energy projects are saving power companies money rather than imposing extra costs that have to be subsidised,” Edis argued.
Taylor’s doomsday figures were drawn from a 2013 “discussion document” developed by his former employer, blue chip Sydney management consultants Port Jackson Partners, which provides advisory services to corporate and government clients.
Taylor joined Port Jackson after working at international consulting firm McKinsey & Co and remained there as a partner for close to 10 years as a resources and energy specialist before making his run for parliament in 2013.
It is not clear who wrote or paid for the study, but Taylor took it upon himself to circulate it amongst his federal colleagues. They were doubtless impressed with the case against renewables from the well-credentialed newcomer and his high-flying firm.
The Port Jackson document, obtained by Inq, promised a compelling case for action: “We believe it is possible to achieve a large reduction in electricity prices at a small cost to the federal government,” Port Jackson Partners asserted, nailing the very issue which would dominate the government of Tony Abbott and beyond.
The “discussion document” ratcheted up the cost in subsidies of the Renewable Energy Target from $3-4 billion in “years to come”.
Wind, it said, was the dominant renewable and wind was at least “triple the cost of coal”. Gas, by comparison, was a “much cheaper source of energy”.
There was nothing subtle about the message: gas good, wind bad.
Edis examined the Port Jackson work for Inq and found that “the complete opposite” had unfolded to what had been predicted.
Port Jackson’s analysts assumed the cost of wind would be $120 per megawatt-hour, but it has turned out to be less than half that, he calculated. Meanwhile the cost of power from new gas plants was now “close to or above $100 per megawatt-hour”.
The business-friendly Australian Financial Review also found fault with Taylor’s numbers as his and Port Jackson Partners’ predictions unravelled.
In 2018 the AFR concluded that the total cost of the RET “could be as little as $200 million a year by 2020 — and falling” — a far cry from the predicted $3-4 billion black hole.
Back in 2013 Taylor used the “$3 billion by 2020” number as a battering ram in his bid for election and to position himself in the powerful conservative wing of the party.
He was supported by the anti-wind farm group, Stop These Things, which called Taylor its “enforcer” in its efforts to halt the construction of windfarms in Taylor’s Hume electorate and elsewhere.
The backers and funders of Stop These Things have never revealed their identities.
Taylor’s anti-wind campaign received the support of Liberal-aligned business figures living in the Hume electorate. They include arch climate sceptic Maurice Newman, who was appointed by Tony Abbott to head the government’s business advisory council in 2013.
Taylor’s anti-wind campaign was also backed by Tony Hodgson, co-founder of Ferrier Hodgson liquidators, who is a member of the anti-climate science Saltbush Club.
Taylor also has strong links to a third climate sceptic business figure and Liberal donor, the London-based Australian hedge fund owner Sir Michael Hintze. Hintze owns three farms in Taylor’s Hume electorate, one of them close to Lake George where wind turbines are highly visible.
As Inq reported, Angus Taylor and his brother Richard managed Hintze’s farming interests in Australia from 2007 through a Taylor-backed company.
After the Abbott government was elected in 2013 it moved swiftly against wind-powered energy in several ways, including reviewing the Renewable Energy Target and appointing a wind commissioner to investigate complaints — moves which created uncertainty in the market and cooled investment.