Essay by Eric Worrall
Even desperate measures like Australia’s attempt to force US AI companies to pay for Aussie Net Zero have fallen flat.
Zombie projects drag on Labor clean energy goals
Ryan Cropp Energy and climate reporter
Jul 19, 2026 – 6.34pm…
Prime Minister Anthony Albanese last week declared that next-generation data centres would be required to add as much power to the grid as they use, and the government is hopeful that the boom will help get many struggling renewables projects over the line.
Tech companies have had discussions with some renewables developers, but have not yet been able to agree on a price high enough to make the projects viable, according to industry sources who requested anonymity to discuss sensitive commercial negotiations.
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Of the 19 winners of the policy’s troubled first competitive auction, which were announced more than 18 months ago, only three have reached financial close, which is typically a key precursor to the beginning of construction.
Across the scheme’s first four auctions, only 13 of the 59 wind, solar and battery projects that won underwriting support have reached financial close, according to data compiled by Infradebt.
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Unions will use Labor’s 50th national conference this week to push the government to take equity stakes of up to 100 per cent in new renewables projects, and use them to supply competitively priced power to manufacturing businesses and heavy industry.
Read more: https://www.afr.com/policy/energy-and-climate/zombie-projects-drag-on-labor-clean-energy-goals-20260719-p60gjq
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What’s happening is hilarious, in a tragic kind of way.
The government has borrowed such a vast amount of money, somewhere in excess of $100 billion by my estimate, to build new powerlines and other supporting infrastructure to designated renewable project precincts, that borrowing splurge has broken the Australian bond market, driving up interest rates to the point most of those projects are no longer viable even with generous government support.
The AI companies aren’t interested in dumping money into Australia’s energy policy disaster, but at least one AI company is buying big in Australia’s premier coal district, where vast quantities of cheap coal are still waiting to be mined, even though they are not allowed to use that coal under current rules. This has to be a bet that the current set of bums which run the country will shortly be tossed out of office (sorry I forgot who mentioned this in comments).
To add to this circus, unions whose members are being very well paid indeed for those projects like Snowy 2 which have gone forward, are demanding the government fling enough money at all the other proposed boondoggles which have stalled thanks to federal economic mismanagement to make them happen.
But One Nation, which stands a real chance of becoming a dominant force in Aussie politics after the 2027 Federal Election, has announced a policy of ending renewable subsidies. Other opposition parties have announced they would dump Net Zero, but it’s less clear whether they want to end renewable subsidies.
To add to the fun, the government just changed the tax system, to tax capital gains on business investment at the same rate as income tax – so going forward, any capital expenditure in Australia needs a really high rate of return to be worth doing.
It’s a real popcorn moment for Australia. Nobody knows which way the Aussie government will jump next. The only thing for sure, going by their track record, is when they come up with a “remediation” plan, it will be more incompetent than anything we can imagine.
