A very public disagreement about the management of the world’s biggest renewable energy export project, Sun Cable, has sparked a plethora of conflicting headlines. It is turning into a billionaire battle. Headlines range from the blunt “Collapse of the $35 Billion Sun Cable” (Spectator) to the mythic “Shades of Icarus and a hint of the Phoenix in Sun Cable’s Collapse” (Sydney Morning Herald).
The Conversation leads with a stoic “The $30 Billion Sun Cable crash is a setback but doesn’t spell the end of Australia’s renewable energy export dreams,” whereas the Australian Financial Review says accusations are flying, and Reuters calls it a “squabble” among billionaires. Well, you know what they say about when elephants fight. Grok (Cannon-Brookes) and Squadron (Forrest) each own 25% of Sun Cable.
I was hoping that after 4 days, the dust might have settled and the situation might be clearer — and the metaphors less mixed. I’m not sure, but here’s what I can make of it.
It appears that Cannon-Brookes and Andrew Forrest failed to agree on a new round of funding for the Australia–Asia Powerlink project. That is, Sun Cable supplying green energy to Singapore via an undersea cable. Power would be supplied by building a 20 gigawatt (GW) solar farm and 42 gigawatt-hours (GWh) of energy storage in the Northern Territory of Australia.
“While funding proposals were provided, consensus on the future direction and funding structure of the company could not be achieved,” Sun Cable said in a statement.
Tech billionaire and climate activist Cannon-Brookes, who became chairman of Sun Cable in October, said he remained confident in the project. Cannon-Brookes is also the largest shareholder in electricity generator AGL.
Future steps are likely to involve voluntary administrator FTI Consulting seeking fresh capital or selling the business entirely, Sun Cable said. My expectation would be that one of the billionaires would buy the other out.
John Hartmen, chairman of Forrest’s private company Squadron Energy, said: “A project with the scale and ambition of Sun Cable requires vision and precise execution. Squadron Energy believes in the vision but believes the manner in which the project is delivered needs urgent change. Exceptional governance practices and world-class project delivery expertise, as well as pursuing bankable technologies, will be required to make the project a reality.”
Apparently, though, Grok Ventures (Cannon-Brookes’ investment vehicle) is already fielding investment offers and would like to remain invested alongside a “consortium of constructive partners.” Squadron may also be considering taking over ownership.
There is some speculation that Squadron may want Sun Cable to use the solar and storage part of the project to support Fortescue Future Industries’ green hydrogen push. Squadron may not believe that the cable link to Singapore is commercially viable.
“Following a comprehensive technical and financial analysis, that included listening to customer feedback, Squadron Energy has concluded that Sun Cable’s Australia-Asia PowerLink project is not commercially viable,” Squardon chairman John Hartman said in a statement on Monday.
“However, Squadron Energy continues to believe in the vision for a game changing solar and battery project in the North Territory’s Barkly region, including the proposed connection to Darwin.
“After recently purchasing CWP renewables. Squadron became the biggest renewable energy developer in Australia. CWP owns 1.1 gigawatts of wind farms and has a development pipeline of 1.3 GW of wind and solar farms, with more on the drawing board, all in Australia.
“Apparently, the dispute between Grok and Squadron was triggered by the missing of some project milestones leading to a delay in the release of funding. However, sources say that this was due to delays within the Indonesian government for granting a permit for the completion of undersea mapping.
“There is no lack of political support for the project – both at state and federal level. Federal Energy and Climate Minister, Chris Bowen said the project was still an important part of the plan to turn Australia into “a renewable energy export powerhouse.”
Northern Territory Deputy Chief Minister Nicole Manison stated: “We understand the company will continue to work on the project while it seeks to address the current shareholder matters. We are confident new funding sources will be found and this world leading project can be delivered.”
Of course, sceptics are lining up to say “I told you it wouldn’t work!” and “Too ambitious, pie in the sky, collapsed under its own weight.” I say, let the billionaires battle. It’s becoming a little like Dr Seuss – when billionaires battle in a squabble over Cable, it can become a Twiggy Wiggy Canon-Brookes catastrophe, sir; Mr Fox, sir.
So, what will it be — like Icarus who flew too close to the sun, fell, and died; or like Dumbledore’s phoenix, will Sun Cable rise from the ashes transformed? Will the project become part of FFI’s ambitious green hydrogen energy production plans, or will it fulfill its ambitious goals and cable electrons from Australia’s abundant northern sunshine to Asia? Whatever happens, it will be epic to watch billionaires battle, and it will spawn many metaphor-laden headlines before the final conclusion.
Featured image courtesy of Sun Cable.
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