The Cable to Nowhere

The Sun(k) Cable project

The big energy news over the last few weeks has been the collapse into voluntary administration of SunCable. Much of the news focussed on the spat between the project’s billionaire benefactors, Mike Cannon-Brookes and Andrew ‘Twiggy’ Forrest. Whether it’s a proper punch on between James Packer and David Gyngell, or the passive aggressive toilet stall scrawling of Andrew Dyer and James Baillieu¹, we here at Currently Speaking love a good fight between wealthy men who should know better. However, no matter how juicy the media tried to frame the spat between Twiggy and Double Bay Jesus, it’s arguably not the core issue with Sun Cable.

Let’s start at the beginning. SunCable is a proposal to build a very, very large solar farm in the Northern Territory and export that power, via a very, very long cable to Singapore. A very, very large battery would help provide firming.²

To put some numbers around this proposal - the solar farm capacity would be half of Australia’s peak demand (20 GW), the cable would run the length of the coastal route from Adelaide to Cairns (4,200 km) and we’ve run out of superlatives to describe how big the battery would be somewhere between 350,000 and 680,000 Tesla Model 3s, depending on the final design (22-42 GWh). The project costs are circa AUD 30 billion.

While these numbers are borderline insane, consider the fact that we have plenty of sunshine and undeveloped land in Australia and Singapore has a distinct lack of domestic energy resources. In fact Singapore is almost entirely reliant both on fossil fuel generation and on imports from other countries, with over 90% of its generation being supplied by natural gas supplied from Malaysia and Indonesia. Singapore is thus a ripe economy to help transition away from fossil fuels.

Enter the very long cable carrying clean green electrons from the sun.

The challenges

1. The proposed high voltage direct current cable is not only the longest in the world by a significant margin, the waters it would need to run through are extremely deep. Aaand, the proposed cable path passes through Indonesian territorial waters. Yes, the same Indonesia whose energy export revenues would be undercut.

2. Indonesia has expressed interest in building a rival high voltage export cable to Singapore. While Indonesia might not be typically associated with the high solar yields of Australia, it is much, much closer to Singapore and already has strong existing trading relationships.³

3. It appears that no one asked Singapore if they actually wanted the cable? Despite the Singaporean government announcing ambitious renewable energy import targets, they’ve never put pen to paper on any agreements. Agreements would be make or break for SunCable. This seems, uh, risky.

4. Even ignoring the undersea cable to Singapore, the proposed solar farm and battery projects are both astronomical in the context of anything that’s ever been built in this country (or, anywhere, actually).

So, when news of SunCable’s collapse in administration broke in mid-January, it would be hard to describe it as a surprise.

In fact, for much of the lifetime of SunCable existence, we here at Currently Speaking found ourselves wondering if there was something we weren’t getting about the project. We don’t profess to be geniuses and there are plenty of moonshots we never would have believed in⁴, but the economics and serious project risks of SunCable just never seemed to click as a sensible investment, despite the money, passion and intelligent people behind the project.⁵ Nonetheless, the project team was set up and they started laying the groundwork for the project.

Enter the Twiggy in the spokes. Forrest, primarily through his renewable-focussed company Squadron Energy has some bold ambitions for the hydrogen economy.⁶ He was an early backer of the SunCable project alongside MCB. However, by late 2022 he was questioning the viability of the project and vetoed additional payments to meet the company’s debt obligations, sending the project into administration. Twiggy is still a fan of the very, very large solar farm in the Top End, but he thinks the very, very long (and very, very deep) cable is a bad idea. Instead, he reckons the very, very large amount of power produced by the solar farm should be utilised domestically to make green hydrogen.

This brings us to the present. The future of SunCable currently rests with the administrators FTI Consulting who are in the process of looking for new buyers for the company. While both Forrest and MCB are vying for control of the company (presumably including the early work and land rights access for the solar farm), MCB’s Grok Investments has said that the dream isn’t over yet and has provided a $65 million loan to ensure the company can stay somewhat afloat until the sale. The sales process is expected to take about three months.

For now the project remains a pipe dream, although it’s worth noting that some respected industry commentators think the project economics might not be quite as crazy as we think.

---

Things Happen

• Barnaby Joyce called the proposed Walcha Wind Farm environmental impact statement a “pile of poo tickets”, which is just the most delightful bogan dog whistle.

• One of the Snowy Hydro 2.0 tunnel boring machines got stuck and caused a sinkhole, but it has a name so how could you be mad?

• The Gordonator failed to reach its Kickstarter goals.

1. Yes, that Baillieu family. Andrew Dyer you might not remember, but he played a brief but significant role as Tony Abbott’s personally appointed Infrasound Investigator National Wind Farm Commissioner.

2. A fancy term for charging the battery with solar power when the sun is shining and exporting that power when the sub is not shining.

3. See the bit about Singapore spending 100s of millions of dollars per year on importing gas.

4. Lots of tiny satellites providing broadband to people who refuse to be price gouged by American internet service providers is one.

5. We mean this very genuinely — Sun Cable employed talented and passionate people, not to mention MCB and Twiggy both have both ambitious visions for the future of clean energy and significant resources at their disposal.

6. Currently Speaking is currently agnostic on the role of hydrogen in the energy transition, but it’s hard to deny the huge amounts of government money sloshing through the sector.