Hunt's new brown coal adviser

The Environment Minister has a new adviser that was an aggressive lobbyist for the interests of Hazelwood power station and argued against the Renewable Energy Target. But he has support from a wind industry leader.

Climate Spectator understands that a new adviser, Patrick Gibbons, has been appointed to Environment Minister’s Hunt’s office. Gibbons has a long history with efforts to discourage and dismantle policies supportive of renewable energy, energy-efficiency and carbon pollution reduction more generally.

Gibbons had been the Victorian premier’s energy adviser over a period in which the Victorian government undertook a range of counterproductive measures for emissions reductions. Top of mind for the renewables sector will be the imposition of onerous 2km setback conditions on wind farms. But he was also involved in a concerted campaign of misinformation surrounding the pricing of carbon pollution to scare the electorate – a campaign that reached ridiculous proportions.

Still, what is likely to cause more concern among the environmental movement and those involved in clean energy is his time spent as a government lobbyist at International Power-GDF Suez (owners of brown coal generators Hazelwood and Loy Yang B) over 2007-2011 and Alcoa, for a year previously. Both companies have had a leading role in criticising and undermining policy measures to support renewable energy and place legal constraints on carbon emissions, although this long preceded Gibbons' time at these companies. 

During his time at International Power the company repeatedly tried to scare politicians and the general public that the carbon pricing scheme was likely to lead to electricity blackouts, unless owners were fully compensated. In a submission to the federal government where Gibbons is listed as the contact it claimed:

...if the CPRS causes – as has been argued by the sector – the premature closure of plant before replacement plant is available, the demand/supply situation will be acute. This is especially the case in Victoria and South Australia. Alternately this situation could lead to a cascading set of interventions under the reserve trader arrangements and result in a complete failure of the NEM.

Several years ago, while I was a researcher at the Grattan Institute, Patrick Gibbons sought a meeting with myself and the chief executive John Daley. During this meeting he almost insisted we should have a staff member from International Power on our energy research program reference group.

I found it to be an extraordinary and incredibly brazen intervention from a determined lobbyist. He knew little about our research and nothing about who was already on our reference group. We had not advertised for reference group participants. Instead, we had invited a select number of people that had excellent reputations for knowledge and insight surrounding energy and climate policy, technology and markets that would give us honest and thoughtful feedback. Reference group members were expected to participate not as representatives of their companies but as individuals with expertise. We already had Paul Simshauser from AGL and Andrew Stock (formerly of Origin Energy) on the reference group, both of whom had extensive experience in large scale power and the Australian energy sector – from a finance and engineering perspective.

Also during the meeting, Gibbons forcefully argued that the emissions trading scheme would lead to blackouts because it would leave owners with insufficient cash to pay their bankers. This didn’t carry much weight with either myself or Daley. Daley’s prior job was with ANZ and I’d worked with insolvency businesses at Ernst & Young and Ferrier Hodgson. We knew that banks don’t shut down assets which are still earning more cash than they cost to operate. Banks are driven by money, not spite.  

Given all this I had great difficulty in seeing how our research would benefit from International Power involvement driven by an aggressive lobbyist.  

Still, a senior and highly respected member of the wind industry, who worked with Gibbons when he was an adviser to Victorian Labor’s Theo Theophanous, told Climate Spectator that he was just the kind of person that the renewables sector needed in Hunt’s office:

“He will be driven by what serves his minister’s interests, not some ideological agenda. He has a very good understanding of the electricity market. He knows very well that the extra power supply from the renewable energy target will drive down wholesale electricity prices. That’s exactly the message we need the Coalition to appreciate.”

He has a point. In a 2008 International Power submission highly critical of the expansion of the RET it states:

... It imposes highly subsidised energy into the generation mix, the result of which will be a reduction in the wholesale energy price…..Customers certainly potentially face lower wholesale energy costs as a result, at the expense of existing investors.

Meanwhile, though, another of Hunt’s advisers has crossed over from Energy Australia. During his time there Energy Australia was spruiking modelling that suggested the RET would substantially increase consumer electricity prices. This was based on a rather dubious assumption about how the wholesale electricity market operated which suggested extra supply in an oversupplied market wouldn’t reduce prices.

This will all put the clean energy sector incredibly on edge, if they wasn’t already.  

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles