Perhaps I should amplify what I mean by the use of the term 'hidden cost shifting by the NSW government' in the last sentence of my previous post.

The Capital Wind Farm has a 20-year contract for the sale of electricity to the Kurnell desalinator starting out at $50 per Mwh with provisions for increases indexed to inflation. So while ever the wind blows fair for the Capital Wind Farm, and/or while ever by way of the exercise of its right to trade in the National Electricity Market (NEM) it is able to on-sell the electricity of other producers, it will get $50 for every Mwh of electricity it supplies to the desalinator, presumably up to its maximum capacity demand of 140 Mw.

Absolutely capital! I wonder whether there is any contractual upper limit to CWF's right to (preferentially?) supply the desalinator at the $50 per Mwh rate, given the indications that desalinator capacity may be increased over coming years?

Consider also, that during off-peak hours, when the NSW government corporation Energy Australia normally has plenty of dirt-cheap electricity to sell at, say, $25 per Mwh, the desalinator may still be buying all its electricity from CWF at $50+ per Mwh. Even better (for the proprietors of the CWF)!

However, consider also what could happen when the CWF is unable, through lack of co-operative winds, to deliver any, or as much, electricity as the desalinator needs. Could it be that, for example, Energy Australia (a NSW government corporation) is contractually a preferred default supplier to the desalinator? If it was to be, would it not be charging significantly more than $50 per Mwh for the electricity it delivered when the CWF continued unable to supply? That would make for more revenue for the NSW government, but higher bills for Sydney Water consumers. Perhaps not so much hidden cost-shifting as hidden increased taxation.

Energy Australia at some other times, when the CWF is delivering, misses out on off-peak sales. All around, a loose-loose situation for NSW residents.

Who owns the CWF?

I suppose when quoting excerpts from an Auditor-General's report an author has to stop somewhere, but it is a pity Kellie Tranter did not include the final sentence of the paragraph quoted in her article, and already reproduced as the first quote in my first post to this thread on Friday, 4 June 2010 at 10:20:16 AM.

That final sentence read:

"It will also increase the supply of wind power in New South Wales
by over 700 per cent."


That's big!


I wonder whether the CWF contract with Sydney Water to supply electricity to the desalinator incorporates rights for CWF to expand its deliveries of power at or better than the contract price of $50 per Mwh, in step with any expansion, as is foreshadowed, of the capacity of the desalinator?

Which brings me to another question: does the right of CWF to trade in the NEM recognised in the contract effectively ensconce CWF as a 'middleman' with respect to all alternatively (to the CWF) sourced electricity supplied to the desalinator over the next 20 years?

If that be so, would that mean that CWF could buy off-peak electricity from, say, the NSW government corporation Energy Australia (or any other government corporation), at, say, $25 per Mwh, and routinely on-sell it to the desalinator at its contract price of $50 per Mwh? Off-peak hours are 10:00PM to 7:00AM, day in, day out. That's 37.5% of all round-the-clock operation of the desalinator, which will be happening at least for the first two years.

But should the desalinator not be needed to operate round-the-clock, and should its management choose to run it during off-peak hours, CWF could be making a gross profit of $11,497,500 pa. without turning a wind turbine blade! The CWF could in those circumstances sell all of its shoulder and peak time output opportunistically into the NEM, knowing it could not lose no matter what the state of the market!

Is this privatising of profits whilst socialising losses?

Kellie Tranter asks in her article, with respect to the Auditor-General's comments on the operational capacities of the Kurnell desalinator:

"Why the distinction between “water consumption”
and “drinking water”? Careless usage or carefully
crafted language?"

I'm not sure as to the significance of the distinction either, but I share the author's concern. Auditors-General must be fairly circumspect as to how they phrase their reports. Sometimes they must rely upon extremely nuanced use of language to publish deeply politically unpopular truths whilst maintaining their integrity, I suspect. I'd ponder that particular usage very deeply.

In doing so, I observe that the term 'drinking water' is also used on page 7 of the PDF of that part of the Auditor-General's report relating to Sydney Water Corporation, linked from this page, http://www.audit.nsw.gov.au/publications/reports/financial/2009/vol7/contents.htm , where he says:

"The Corporation is required under its Operating Licence
to reduce drinking water use by 80 per cent at the Malabar,
North Head and Bondi Sewerage Treatment Plants (STPs).
All other STPs and storm flow sewage treatment plants
must use at least 85 per cent recycled water for treatment.
The Corporation has met both targets.

Since 1995, the Corporation has increased the amount of
recycled water used in its sewage treatment plants from
17 to 43 megalitres per day, significantly reducing the
volume of drinking water used at the plants."

It is interesting to note on the same page of the PDF that recycled water as a percentage of total effluent discharged during 2009 is shown as being 5.3% . This doesn't seem to be consistent with the claim that 'drinking water' usage has been reduced by 80% at the Malabar, North Head and Bondi Sewerage Treatment Plants. Surely Sydney Water Corporation can't be excluding the inflowing effluent that it treats as not being originally almost entirely 'drinking water', can it?

What a joke if it is!

I don't know if any of this helps, Kellie, but generally any vessel (or corporation) dead in the water is an easy target for a torpedo.

On the subjects of carefully crafted language and extremely nuanced Auditor-General-speak, I have just noticed a little discrepancy between the Auditor-General's words as quoted by Kellie Tranter and those used in what I have taken to be the source document in the Volume 7 referred to in Kellie's text link in paragraph 9 of her article.

What I have taken to be the source of Kellie's quote is that part of Volume 7 headed 'Sydney Water Corporation', which is the second-last entry on the page of links to the components of Volume 7, which is obtainable here: http://www.audit.nsw.gov.au/publications/reports/financial/2009/vol7/contents.htm , where Kellie's text link delivers the viewer. What I have taken to be the source quote is the fourth paragraph on page 3 of the PDF document to which the text link 'Sydney Water Corporation' delivers one.



The problem is that the words ", as opposed to it being operated by renewable energy." included in Kellie's quote nowhere appear in this part of the Auditor-General's report.



Has Kellie Tranter sourced a substantially similar paragraph from somewhere else in Volume 7 of the A-G's report, or has she inserted the words ", as opposed to it being operated by renewable energy." as an amplificatory note, in the process thereby putting words in the mouth of the Auditor-General that he never used?

If there is another similar paragraph elsewhere in the report it is possible that it may not have contained the words 'It will also increase the supply of wind power in New South Wales by over 700 per cent', the seeming omission of which I mildly deplored in my post of Monday, 7 June 2010 at 8:42:43 AM. My apologies to Kellie Tranter if this has been the case.

Can the author, or anyone, set me straight on this little matter?

If there is another similar paragraph, as I suspect, then there exists an interesting trail of Auditor-General's nuances, doesn't there?

Or a trail of editing of the Report.

Well done Forrest Gumpp. What isn't in a report is often as important as what is. Kellie will be able to illuminate.
Greg Cameron

Dear Forrest

Thank you for your posts, information and more importantly, for your correction.

I omitted to pick up on the placement of the quotation marks during the editing process. The paragraph should in fact read as follows:

The Auditor-General’s Report to Parliament 2009 Volume Seven says “... the power need of the desalination plant will be offset by renewable energy at a wind farm...", as opposed to it being operated by renewable energy. "The wind farm is located between Bungendore and Tarago and Renewable Power Ventures (a subsidiary of Infigen Energy) has built and will operate the wind farm. The wind farm, known as the Capital Wind Farm, has a capacity of 140 megawatts ...”

Many thanks
Kellie