Anton Vikstrom’s course towards electric vehicle entrepreneurship was set in a Hobart bar in February 2019.
Vikstrom, who had a 15-year history in renewable energy, project managing solar installations for various organisations in Australia and Timor-Leste, was having drinks with his friends Sam Whitehead and Anthony Broese van Groenou, who also had long backgrounds fostering sustainable energy in various ways.
All three men wanted new vehicles for their businesses, and all wanted them to produce zero carbon emissions. But, Vikstrom says, “When you’ve worked in the environmental sphere your whole career, you can’t afford Teslas.”
And so, they started looking for another way. After a little research, the trio decided to import used electric vehicles from Japan, for a couple of reasons. First, there are five large car makers in Japan that have moved into electric vehicles in a big way. And second, the way the Japanese tax system works, “people are kind of forced to sell their cars after a few years [so] cars depreciate really quickly in Japan”.
So, they got their cars. Then friends wanted EVs. Then, in December 2019, they ran a community electric vehicle bulk buy in their local area and got 24 orders. “And that’s when we had a business,” says Vikstrom.
More than 100 sales later their small business, the Good Car Company, conceived out of concern for the climate rather than for profit, is growing well and expanding beyond the Apple Isle.
“We’re just about to do an EV bulk buy in the ACT, which is launching ... on March 25,” says Vikstrom.
They already have 170 expressions of interest.
Vikstrom and his business partners represent just a small part of a huge and diverse ecosystem of renewables ventures that’s rapidly expanding in Australia, despite a harsh political climate.
The business life forms that make up this ecosystem are enormously varied in size and shape, ranging from the tiny – such as the Good Car Company and Jaunt, a Melbourne company that puts electric motors in classic Land Rovers – to those building giant solar and wind farms. Then there are those that install grid-scale batteries and work up technologies to process Australia’s mineral resources without fossil fuels, or those that send clean energy, in the form of electricity or green hydrogen, out to the world.
This ecosystem also supports a plethora of less visible species – the tech boffins, financiers, mentors and advisers who are helping behind the scenes.
What they all share is a vision of the post-carbon future and an adaptive capacity that is singularly lacking in our national government.
After almost eight years in power, the Coalition has taken Australia from being a world leader to a laggard when it comes to climate policy. In the background though, smart people are moving ahead anyway, despite the government – not only because it is the right thing to do by the climate, but also because there is money to be made. In some cases, huge amounts of money.
But let’s start small, with the Good Car Company, a business that was actually made possible by the government’s lack of vision.
In May 2019, just a couple of months after Vikstrom and his mates met in that bar, Australia went to the polls. One major party, Labor, had a detailed EV policy. It set a target of 50 per cent of new car sales by 2030. To help meet that target, it promised to make the government’s own car fleet 50 per cent electric by 2025. It also promised a generous depreciation allowance for business car fleets; to require that battery-charging infrastructure be built with new roads and commercial and residential developments; stricter fuel economy standards for internal combustion engines; and more.
The Morrison government did not even try to compete on policy. Instead, it embarked on a scare campaign, suggesting the opposition was intent on denying tradies their utes and forcing citizens into cars that wouldn’t tow their boats or take them off-road to camping spots.
“Bill Shorten wants to end the weekend, when it comes to his policy on electric vehicles,” said Scott Morrison at one carefully staged media event on April 7, 2019.
At the time, it seemed cynical; less than two years later, it looks patently ridiculous.
Tesla founder Elon Musk is now reputedly the richest person on the planet with a net worth $US182.9 billion as of January, according to Forbes magazine. His company is worth more than General Motors, Toyota, Volkswagen and Ford combined. Such is the market’s faith in his vision for electric cars.
Most of the world’s major car makers have plans to produce only zero-emissions vehicles within 10 to 15 years, the most recent being GM of the United States, which announced two weeks ago that it would no longer make petrol or diesel cars, buses or SUVs after 2035.
And governments around the world have moved, too, through a variety of incentives – sales tax breaks, subsidies and more – to encourage the uptake of EVs.
But not our government.
As a consequence, EVs make up a tiny proportion – about 0.6 per cent – of new car sales in Australia, in part because the upfront cost of buying one is so high. And this is what makes viable the business model of the Good Car Company. Australians wouldn’t be buying second-hand EVs if new models were affordable.
Other nations are doing much better. Norway leads the pack. More than 50 per cent of new car sales there already are EVs, and the sale of new internal combustion vehicles will be banned from 2025. Most of the rest of Europe will follow within 10 or 15 years.
And their target dates are becoming more ambitious as technology advances and the sense of urgency about dealing with climate change intensifies. Britain’s Tory government, for example, originally set 2040 as its target date for banning vehicles powered solely by internal combustion engines (ICEs). Last February, Prime Minister Boris Johnson announced the target would be moved forward to 2035. In November, it was moved again, this time to 2030.
As the countries most important to Australia in trade terms, and the sources of most of our vehicles, move to ban ICE vehicles – here we are talking about Britain, Japan, China and European Union nations, though not yet South Korea – this country’s ICE vehicles remain a decade behind technologically. We can’t get the best and most economical engines in this country because our fuel is too dirty.
The one major ally the Morrison government had in its inertia was Donald Trump, but now the new Biden administration is moving with startling speed to bring in a raft of changes to incentivise American consumers to go electric. One of those is a plan to build 550,000 charging stations to support the shift to electric vehicles.
In Australia, despite the current government’s lack of interest, smart money is backing the inevitability of electric vehicles. Just three years ago, a new start-up named Chargefox managed to raise $17 million from various sources, including motoring organisations, private sector entrepreneurs and grants from the Victorian government and the Australian Renewable Energy Agency (ARENA) – a government funding body set up by Labor, slated for abolition by Tony Abbott when he was prime minister, then saved when Malcolm Turnbull came to power.
The new company faced what it called a “chicken-and-egg scenario” – people would not buy electric cars if they had nowhere to charge them, but unless people bought electric cars there was no incentive to build the infrastructure.
Nonetheless they built it, with an initial rollout of 21 charging stations. There now are 6000 EV charging stations across Australia, including 20 “ultra-rapid” ones, capable of delivering up to 400 kilometres of range in just 15 minutes. All using clean energy.
Big car makers have partnered with Chargefox, out of obvious self-interest, but so too have supermarkets and others, because it provides convenience for their customers.
Shopping centres have big buying power and also big roofs, thus big capacity to generate solar energy. Indeed, Tim Washington, a co-founder of Chargefox and a man with a finger in various other renewables pies, predicted to The New Daily’s Alan Kohler, shopping centres could become the largest electricity retailers in the country, repowering EVs with clean energy as people shop.
This is a vision that makes Labor’s 2019 policy look modest.
In late 2017, Australian tech billionaire Mike Cannon-Brookes prevailed on Elon Musk to build what was then the world’s largest battery in South Australia. Scott Morrison responded with mockery, calling it a “Hollywood solution” to the state’s power supply problems.
“By all means, have the world’s biggest battery, have the world’s biggest banana, have the world’s biggest prawn like we have on the roadside along highways around the country, but that’s not solving the problem,” the prime minister told reporters in Adelaide.
“It is so at the margin it barely is worthy of a mention.”
The comments betrayed an ignorance of the battery’s main purpose, which was not so much in storing electricity as it was to regulate it. Because the battery could respond in milliseconds to variations in power supply and demand, it helped stabilise the grid, providing what experts call “frequency control ancillary services”.
In the first three months of 2018, the “big battery” – also known as the Hornsdale Power Reserve – reduced the cost of frequency control by some $33 million, or 57 per cent, according to the Australian Energy Market Operator. The new technology was so successful that the South Australian government – a Liberal government – subsequently expanded it by 50 per cent to 150 megawatts.
Three years down the track, the “big battery” doesn’t look so big anymore. Plans for new batteries are appearing like mushrooms after rain, each bigger than the last.
In December last year, French company Neoen announced it is scoping a 500-megawatt battery near Lithgow in New South Wales. In early January, Origin Energy revealed plans for a new “Australia’s biggest battery” at its ageing coal-fired power plant in Eraring in the NSW Hunter region. Just last week came another, this time billed as the world’s largest battery, a $2.4 billion investment by CEP.Energy at Kurri Kurri, north-west of Newcastle, which will ultimately have a capacity of up to 1200 megawatts – eight times the size of Hornsdale.
Founded just four years ago, CEP.Energy has fast become a heavy hitter in the renewables space. Former NSW premier Morris Iemma is the chairman of its board; its chief executive, Peter Wright, is a former executive director of Macquarie Bank. The company is also engaged in the process of installing solar panels on the roofs of industrial parks around the country, to generate another 1500 megawatts of solar energy, with 400 megawatts of storage.
But all else is dwarfed by a couple of planned developments in northern Australia.
One of them is named the Asian Renewable Energy Hub. The plan is to install 1600 wind turbines and a 78-square-kilometre array of solar panels to generate 26 gigawatts – three of which would go to users in the Pilbara, including miners, while the rest will power the production of green hydrogen for export around the world.
The logic behind it is simple, says project manager Andrew Dickson, who has 20 years’ experience developing wind farms.
“The next frontier really is exporting renewables,” he says. “We’ve got plenty of land and plenty of sun and wind. And many of our neighbours to the north don’t. Indonesia, Singapore ... they don’t have options to do renewables like we can.”
He sees vast economic benefits for Australia and the world.
The other huge project on the horizon is Sun Cable, which proposes to put solar panels over 15,000 hectares of the Northern Territory, with a generating capacity of 14 gigawatts and 33 gigawatt hours of storage. This is battery storage equivalent to more than 170 of South Australia’s batteries.
Sun Cable is backed by big money interests, including Cannon-Brookes and fellow rich-lister Andrew Forrest.
The project is massive on any scale, including cost: $22 billion. The plan is that it will deliver electricity, night and day – hence the batteries to cover the hours of darkness – from sunny Elliott in the centre of the NT to Darwin, more than 700 kilometres away. From there the electricity will travel by undersea cable a further 3800 kilometres to Singapore, where it will provide some 20 per cent of the city-state’s electricity needs.
It’s not hard to understand Singapore’s enthusiasm for the project – it has no land to spare for harvesting the sun. Nor is it hard to see why investors foresee a handsome return.
Eytan Lenko is one of those such investor. He is like Cannon-Brookes in many ways: in his early 40s, smart, made a lot of money as a technology entrepreneur – although nowhere near as much as Cannon-Brookes – and is dedicated to a transition to clean energy. He is the chair of the green think tank Beyond Zero Emissions (BZE) and a director of the Australian Environmental Grantmakers Network, which seeks to harness philanthropic money for green purposes.
If Sun Cable comes off, Lenko stands to make a lot more money, but his motivation is basically altruistic. And logical.
“I’ve been involved in BZE for 10 years,” he says, “and I’ve been talking about this stuff and understanding this stuff a long time.
“Once you’ve got that understanding … it becomes like a natural progression to start investing in the space. You know, whether it’s getting stuff off the ground that wouldn’t have gotten off the ground, because it was seen as too high-risk or … just putting your money where your mouth is.”
Simon Holmes à Court, a serial renewables entrepreneur, is excited about both the Asian Renewable Energy Hub and Sun Cable, although he hasn’t invested in either. “So, for the time being,” he jokes, “I don’t have any conflicts [of interest], but I’m looking for some.”
Holmes à Court is particularly bullish about the potential of green hydrogen to revolutionise manufacturing and heavy industry. He visited ThyssenKrupp, one of the world’s biggest steel makers in Germany, 18 months ago.
“They were working at two different processes for how to switch from coal to hydrogen for their steel-making. They said, ‘We don’t quite know how we’re going to get there. We don’t know how much it’s going to cost. But we know we’ve got to do a 30 per cent [carbon emissions] reduction by 2030, total decarbonisation by 2050,’ ” says Holmes à Court.
He is puzzled and irritated by the government’s, and particularly Energy Minister Angus Taylor’s, “obsession” with gas as the fuel of the future.
He recalls Taylor spruiking “huge baseload gas generators” well before he was elected to parliament. “I thought it bizarre then, and it’s even stupider now,” he says. “Now we are at rebuilding the whole energy system over the next, say, 20 years. And 20 years is probably going to be shifted up to 15 years, and then three years from now, I’d probably say 10.”
Australia should be better placed than most countries to cope, not just because of our geographic and climatic advantages, but also because we have the human capital to plan for it.
Martijn Wilder both exemplifies and attests to that. He is a former chair of ARENA and founding director of the Clean Energy Finance Corporation, and also was head of Baker McKenzie’s global climate law and finance practice for 20 years, among other things. Most recently he was co-founder of Pollination Group, a specialist climate change advisory and investment firm with offices in Australia, the US and across Asia and Europe.
“Australia has a fundamental opportunity to be a powerhouse in renewable energy in decarbonisation,” he says. “We can build a whole new energy system, manufacturing system off the back of a renewable energy. It’s a once-in-a-lifetime opportunity, and we just cannot afford to miss it.”
The “funny thing”, he says, is that a lot of Australian companies are looking overseas for the expert advice to help them transition, when many of the best people are Australian.
He credits that to the fact that Australia was once a leader, once had a carbon trading scheme, before this government abolished it, has long experience in renewables, and had structures set up by former governments to advise.
“Despite the politics of climate change, business has been quite engaged and entrepreneurs do still try their best to make things work,” he says.
In other words, capitalism may yet save the day, even as government fails.
This article was first published in the print edition of The Saturday Paper on February 13, 2021 as "Who’s about to get rich off the green energy revolution?".
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