Angus Taylor
Minister for Energy Angus Taylor (Image: AAP/Mick Tsikas)

Management consultancy firm Port Jackson Partners is proud of its alumni. Go to its website and you will find the smiling faces of several well known and high-achieving Australians. This includes ACCC chairman Rod Sims, former Fairfax CEO Fred Hilmer, and chairman of the Sydney Symphony Orchestra Terrey Arcus (Arcus and Hilmer founded the firm together).

And then there is Angus Taylor, the federal member for Hume and the nation’s energy minister.

A screenshot from the Port Jackson Partners website.

But Port Jackson appears to be less proud — and is certainly less forthcoming — about Taylor’s legacy with the company, in particular its study into the economics of wind turbines.

The company’s current managing partner, Byron Pirola, declined to answer a series of questions about the report, including claims that it used out-of-date figures to denigrate the viability of wind. The company also declined to say who had commissioned the “discussion paper”, who paid for it and who wrote it.

The report in question is seven years old. And a lot has happened in the energy market since then. So, why the sensitivity?

The Port Jackson study, touted in Liberal Party circles by then-federal candidate Taylor, made a bold central argument for gas: it was a “much cheaper” source of energy than wind and it was better for reducing emissions.

“One major gas-fired power station could achieve the emissions reductions of the entire wind industry,” the study claimed.

(Pirola is no stranger to gas. He declares on the company website that he is a non-executive director of an ASX-listed gas development and exploration firm. He joined the board of European gas company Po Valley in 2002.)

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 among his new federal colleagues. They were doubtless impressed with the case against renewables from the well-credentialed newcomer and his high-flying firm.

Economist Tristan Edis, who has analysed the Port Jackson document for Inq, cast doubt on the report’s claim of emissions reduction. Edis tracks the market in renewable energy certificates as director of analysis at Green Energy Markets.

“If you wanted to deliver the same abatement that wind generation delivered back in 2013, you’d need a very big gas power station — about four and half times bigger than Australia’s largest operating gas power station.

“And if you wanted to deliver the amount of abatement wind delivered in 2019 you’d need a gas plant that is almost 13 times larger. It would be equal to about 85% of the entire installed gas fleet operating across the National Electricity Market.”

Edis first pointed to problems with the Port Jackson report, which was not publicly available, back in 2013.

He found that Port Jackson Partners had worked off “hopelessly out-of-date data” on the cost of wind production, with the result that its analysts had overestimated the cost difference between wind and gas “by 400%”.

“Furthermore there is less risk associated with the wind projects because they don’t have a major fuel cost to manage that is increasingly linked to global oil prices with the rise of LNG (liquified natural gas),” Edis added.

Taylor’s figures also took a pounding when the 2017 Finkel review into energy, commissioned by COAG and led by Australia’s chief scientist Dr Alan Finkel, found the high cost of gas was the number one cause of higher electricity prices.

Finkel said it was irrefutable that renewable energy such as solar and wind was more affordable than fossil fuels in the current energy market and that investors favoured wind and solar because they were cheaper than coal and gas. 

Taylor has declined Inq’s invitation to comment on why his numbers have proved to be so wrong. The report, dated February 2013, was developed at a time when Taylor’s bid to enter parliament was well underway.

Taylor and his family had moved from their Eastern suburbs Sydney home to take up residence near Goulburn in the Hume electorate, where he was slated to succeed long-serving Alby Schultz.

So determined was Taylor to enter parliament that he put up $155,000 of his own money as a loan to the Liberal Party to pay for his campaign costs.

But Port Jackson Partners’ refusal to reveal who paid for the work, which was clearly designed to influence government policy, leaves open the possibility that it was funded by vested interests in the gas industry.

Taylor, too, has refused to reveal who he consulted in the years before he entered federal parliament.

In the last week, Taylor has put gas squarely into the energy equation with the federal government’s multibillion-dollar deal with the NSW government contingent on unlocking new gas supply in the state.

The federal government is also pressuring the Victorian Labor government to lift its ban on on-shore drilling of coal-seam gas, a move that closes a circle for Taylor.

In late 2013, as he moved from Port Jackson Partners to federal parliament, Taylor was appointed to a Victorian Liberal government taskforce, chaired by Howard-era stalwart Peter Reith, to examine coal-seam gas exploration.

Every member of the taskforce represented energy companies or associated industries and lobby groups. 

The committee recommended the state develop an “unconventional gas” industry covering coal-seam, shale and tight gas exploration. The incoming Andrews government put in place a ban instead.  

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Peter Fray
Peter Fray
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