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  • Writer's pictureGeoff Russell

The great Australian greenwashing scam

Updated: Jan 24, 2023

One of the less frequently reported events at COP27 in Egypt was the presentation of a UN report on Corporate Greenwashing. At least I think it was presented, but perhaps it was just talked about by Catherine McKenna, head of the High-Level Expert Group investigating net-zero commitments.

Secretary General António Guterres had quite a bit to say about it; here’s a nice quote:

"The problem is that the criteria and benchmarks for these net-zero commitments have varying levels of rigor and loopholes wide enough to drive a diesel truck through."

I reckon Guterres is excessively abstract and far too polite, he doesn’t detail the loopholes or name the people telling the lies. I kind of understand his reluctance to name companies and people, at least not on paper – you’d need to destroy a small forest to draw up a list. But not describing the details is a serious omission.

Let me rectify it; I won’t talk about the fancy plans that lawyers and accountants dream up for big companies, but focus on something everybody should understand.

I had an argument recently with a mate, or perhaps now an ex-mate, about being vegan. He claimed to be vegan while three quarters of the way through a rather large steak. I’d never thought of him as vegan, ‘cause I knew he wasn’t, so why did he say it?

I went vegan for the planet!” he replied, sporting a terrific black and green “100% VEGAN” T-shirt; made in China, but now stained by drizzles of meat fat.

Here’s how he figured it: he’d found a food retailer peddling what are called Protein Purchase Agreements (PPA). My mate calculated his protein intake for each day, 70 grams, and then he makes a deal with the retailer. The retailer will provide all his usual food while guaranteeing to buy 25.5 kilograms of plant protein a year (that’s 70g x 365). When the retailer buys it and who they sell it to isn’t relevant to my mate; he just eats his usual diet and pays the retailer. What a deal!

Okay, so my mate is a liar.

What happens when a lie becomes really common? Does it cease being a lie?

Eventually of course, if enough people sign up, the retailer will run out of people to sell those plant proteins to and the whole scheme will come crashing down. Think FTX, Enron, or Bernie Madoff, but bigger.

There is, of course, no shortage of people to eat plant protein; in most Australian diets, wheat provides almost twice the protein of beef, but the scheme clearly can’t work if all 26 million Australians sign up.

Not that my mate cares, his PPA is locked in for a decade!

Consider now the other increasingly popular PPA; the power purchase agreement (PPA). Here’s how it is described in a report to a local council in NSW. Should I name the company or the local council? Perhaps. But for now, just focus on the description:

There is no official definition of what a 100% renewable energy target means, but a lot of organisations interpret it to be when the amount of renewable energy purchased is equal to or more than what is consumed.

It’s just like my mate’s big vegan lie.

The scam works the same as the vegan scam. You contract with some retailer to supply 10 megawatt-hours of electricity at some agreed price and ask them to buy an equivalent amount of renewable electricity.

You pay the price and it’s up to the retailer to buy 10 megawatt-hours worth of RECs from some supplier. The REC is just a guarantee that somebody, somewhere, at some time, generated a megawatt-hour of renewable energy; not that they generated it when and where you want it. The latter task being ever so much harder to do.

The REC could come from a solar, wind or hydro plant. It’s up to the retailer to pay for the 10 MWh that you actually use, regardless of where it comes from. They will be hoping and betting that the prices they are paying for the electricity that doesn’t come from renewables don’t eat up too much of the profits they make on the electricity that does, or alternatively that they’ll make enough profit from any cheap gas and coal electricity they supply to cover the cost of the renewables. Either way, they are just another layer of rent-seekers creating salaries that need paying between the people producing the electricity and the people using it, meaning you.

As lies go, the 100% renewable PPA lie is about as big as Donald Trump’s big lie; or my mate’s vegan lie.

How often have you seen solar companies say about their solar farm … “this produces enough power to power so-and-so many thousand homes”? It’s a lie. It’s not an exaggeration – an exaggeration would be to use a very small average electricity requirement to calculate the number of houses. It isn’t a lie like “Things go better with coke!” which is just vacuous, it’s just a plain old-fashioned, deliberately false claim that those making it know to be false, but make it anyway.

Suppose you built a home, connected it to Origin Energy or some other provider and every day, sometime in the afternoon, the lights and everything else stopped working. You’d sue them, and they’d lose. Because they didn’t power your home under any reasonable definition of what it is to power a home. An honest solar photovoltaic (PV) company would simply list the average annual gigawatt-hours of energy their plant can supply and perhaps the daily output and standard deviation.

All of Australia’s solar farms tell these lies. All of Australia’s wind farms tell these lies. All of Australia’s (and the world’s) 100% renewable energy advocates tell these lies. Greenwashing isn’t just something practised by big business, it’s endemic from the bottom to the top.

When politicians talk about renewables being the cheapest form of electricity, they are finessing the language to mislead people without being caught in a lie. Comparing prices of fundamentally different things is always difficult. And a robust 24x7 grid supply of electricity is a very different thing from something that is available for a restricted period at an unreliable rate. Imagine if our hospitals employed solar doctors, who only worked when the sun was shining. Would Chris Bowen still stand up and defend them as the cheapest form of medicine? Anybody who did this would and should be sacked. So why do politicians and everybody else get away with what should be viewed as rank dishonesty?

I suggest it is because they are too lazy to try and think climate solutions right through, from start to finish. I did a series of posts a while back starting with renewable experts from three big US renewable labs who were pretty clear; they really had tried to calculate the 100% renewable endgame; the truth is that 100% renewable electricity is really hard and 100% renewable energy is pretty well impossible and highly undesirable. The difficulties even for the easier special case of electricity, start at about 80% and just get increasingly harder as you approach 100%. Compare the views of those experts with Australia’s 100% renewable liars:

“Do we have a deal for you! … just pay us and we can present you with a big badge saying 100% renewable! You won’t have to think, or change what you are doing, just sign here!”.

P.S. The story about my vegan mate was, of course, entirely fictional. Everybody gets what it means to be vegan, and everybody gets what it means to be 100% renewable, they lie about it because the real thing is much too difficult. Real action on climate starts by telling the truth. But the story about a vegan is also useful for another reason. If you can't change your diet, then how do you expect big industries to invent complex new processes, open new mines, change every little thing about the way they work ... while you can't even change your diet!



Graeme McElligott
Graeme McElligott

I have often wondered about the ACT's situation. The government claims we are effectively 100% renewables and that we have very cheap electricity because the government has negotiated supply contracts with wind farms and we have some solar farms. OK, I see what they mean here, but really we are connected to the NSW grid which at pretty much any time of day is about 60-70% coal and gas. Recently when prices went through the roof, the government reassured Canberrans that we were fine because of our renewable energy contracts, and indeed we were protected from the price spikes. But... if we are connected to the NSW grid, then we are depending on coal and gas for 100% relaible supply.…

Geoff Russell
Geoff Russell

The retailer has to make up those losses from somewhere ... absolutely (or go bust!)

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