Search results

This paper aims to provide investors’ views on financing costs and barriers to entry into the electricity generation sector, with a focus on investors’ views on potential impacts on cost of capital from adopting nodal pricing and financial transmission rights (FTRs). The implications for policymakers and policy reforms are also discussed in detail.

Survey-based data collection of investors and developers in electricity generation, consisting of multiple choice questions from a closed list of discrete choices, binary-choice questions, and questions with free-text/open-ended answers.

Across survey respondents, weighted-average cost of capital (WACCs) were broadly unchanged over 2019, with increases for undiversified/non-integrated participants offset by decreases for horizontally integrated participants. Cost of equity has risen, whereas cost of debt has fallen. Nodal pricing-cum-FTRs were estimated to increase WACCs by 150–200 basis points p.a. (15–20%), reflecting concerns around the firmness of FTRs and ability to automatically access intraregional settlement residues.

These findings have energy policy implications, namely, the need to consider the interaction between economic theory and real-world financing models when designing and implementing fundamental energy sector reforms.

The need to consider implementation and transitional issues (e.g. grandfathering of existing rights, focusing on reducing the largest barriers to entry) is associated with implementing nodal pricing.

Unique set of survey questions and insights that have not previously been addressed in an Australian context; what-if analysis not previously done in an Australian context

The purpose of this article is to analyse electricity supply in the Solomon Islands face extraordinarily expensive electricity tariffs – currently set at 96 c/kWh – making them amongst the highest in the world. Power is supplied by a fleet of diesel generators reliant on imported liquid fuels. In this article, the authors model the 14,100 kW power system on the island of Guadalcanal and demonstrate that by investing in a combination of hydroelectric and solar photovoltaic generating capacity, power system costs and reliability can be improved marginally. However, when the authors model a 3-Party Covenant (3PC) Financing structure involving a credit wrap by the Commonwealth of Australia, electricity production costs fall by 50 per cent, thus resulting in meaningful increases in consumer welfare.

This study’s approach uses an integrated levelised cost of electricity model and dynamic partial equilibrium power system model. Doing so enables the authors to quickly analyse the rich blend of fixed, variable and sunk costs of generating technology options. The authors also focus on the cost of capital that is likely to be achieved under various policy settings.

The authors find that a 3PC Financing policy can substantially reduce the production costs associated with capital-intensive power projects in an unrated sovereign nation. Such a policy and associated prescriptions are not specific to the Solomon Islands or power generation. The conceptual framework and associated financial logic that underpins the initiative can be generalised to other “user pays” infrastructure projects and to other developing nations. The broad applicability of 3PC financing means that it is not country specific, project specific or asset class specific.

It is important to note that the analysis in this paper has a number of limitations in that the authors do not deal with rural electrification or distribution network costs. The focus of this paper is to identify policy interventions that are capable of making profound changes to the cost and the reliability of wholesale electricity production.

The focus of this paper is to identify a policy intervention capable of making profound changes to the cost and the reliability of wholesale electricity production. While there is nothing novel associated with a 3PC Financing per se, the authors are unaware of its direct use as a form of delivering foreign aid. A 3PC Financing has the effect of shifting the source of aid funding from fiscal account surplus/deficit (i.e. cash outlays) to balance sheet (i.e. credit wrap). However, this is not a “magic pudding” – 3PC Financing creates an asset-backed contingent liability and will have the effect of reducing the donor country’s own debt capacity by a commensurate amount, holding the nation’s credit rating constant.

In the Coen Brothers’ film, O Brother Where Are Thou?, set in depression‐era southern USA, one of the three convicts on the run is thrown out of a Woolworth’s shop and told never to come back. “Does this mean I’m banned from just this shop or all Woolworth’s?” Delmar, played by Tim Blake Nelson, worries. The joke reflects the affection that existed then, and does still, for a retailer that is seen by many people as being cheap and cheerful. However, loved or not “Woolies” is in crisis. When Trevor Bish‐Jones was appointed chief executive in March last year he took over a retailer facing huge problems.

This paper questions whether carrying out the ‘sale‐and‐leaseback’ of corporate real estate is compatible with achieving the flexibility and cost effectiveness that companies need in the operation of their facilities. It looks at the advantages and disadvantages of sale‐and leaseback transactions and analyses how these compare with achieving wider business planning issues. The paper also reports on new real estate techniques pioneered by corporate real estate partnerships (REPs) transactions in Europe and examines whether this form of outsourcing is more in harmony with the goals of the modern corporate.

Climate change policies such as carbon taxes and emissions trading schemes are being developed and implemented in ways which fundamentally transform the profitability of industries and businesses. While mandatory reporting of greenhouse gas emissions by individual Australian companies is now largely standardised, the financial implications of emissions trading and other forms of climate change policy are poorly understood. This paper aims to discuss these issues.

A literature review was conducted of financial analyst research on this issue and determined that this poor understanding is the result of either insufficient information being available to adequately evaluate the risk to business or a lack of understanding about how carbon policies will impact on business.

This paper proposes a “checklist” for evaluation of the risks and opportunities created by pricing carbon to address this analytical chasm. Most importantly, like any significant tax reform, the paper concludes that it is impossible to create simple metrics that can be used across all industries and companies.

The paper outlines, for the first time, a checklist for analysis of the impacts of carbon pricing on Australian businesses.

With the objective of developing an evidence‐based corporate responsibility program aligned to core business functions, this article aims to outline the review process undertaken by AGL in identifying the long‐term focus for new strategic partnerships. It also seeks to lay the foundation for AGL to better assess the outcomes of the program in the future.

In undertaking the review, AGL drew on employee surveys, stakeholder consultation, sustainability indicators and new research on the demographics of customer hardship. Core focus points of financial hardship and household safety were identified as priorities for the program and new long‐term partnerships were developed to specifically address these causes.

The research underscores the priority placed by AGL on the development of long‐term strategic charity partnerships and the integration of various components of the program including employee giving, volunteering and specific targeted initiatives.

There is greater scope to expand on the foundations laid in the paper, in particular to explore outcomes‐based measurement techniques as they are applied to community investments and employee engagement.

The paper outlines the potential benefit of developing an evidence‐based strategic approach to charity partnerships, which can be integrated with employee engagement opportunities.

This paper is intended to contribute to building the body of knowledge for the implementation of integrated, evidence‐based corporate responsibility programs. In particular, the authors hope that the framework provided in the paper can outline the practical steps companies can take in developing targeted, long‐term partnerships, moving towards outcomes‐based assessment.

The most problematic area of any carbon policy debate is the treatment of incumbent CO2 intensive coal‐fired electricity generators. Policy applied to the electricity sector is rarely well guided by macroeconomic theory and modeling alone, especially in the case of carbon where the impacts are concentrated, involve a small number of firms and an essential service. The purpose of this paper is to examine the consequences of poor climate change policy development on the efficiency of capital markets within the Australian electricity sector.

The authors conducted a survey of Australian project finance professionals to determine the risk profiles to be applied to the electricity sector, in the event a poorly‐designed climate change policy is adopted.

The Australian case study finds that if zero compensation results in the financial distress of project financed coal generators, finance costs for all plant rises, including new gas and renewables, leading to unnecessary increases in electricity prices. Accordingly, an unambiguous case for providing structural adjustment assistance to coal generators exists on the grounds of economic efficiency.

Accordingly, the paper shows that an unambiguous case for providing structural adjustment assistance to coal generators exists, on the grounds of economic efficiency.

Action in the 1980s to a large extent belonged to the hard, hyper-masculine physiques of Arnold Schwarzenegger and Sylvester Stallone, who seemed to embody the aggressive, go-getting, testosterone-fuelled spirit of the age. Except, as this chapter argues, it would be a mistake to take these representations of masculinity at face value.

Susan Jeffords has noted the evolution of Schwarzenegger's Terminator character from hard-bodied killer to nurturing father figure, linking this to the change in perceptions of masculinity between the Reagan and Bush eras. Indeed, as Schwarzenegger moved into the 90s his films increasingly played with notions of ‘the feminine’ – from the nurturing Schwarzenegger of Kindergarten Cop (1990) to the ‘maternal’ Schwarzenegger of Junior (1994).

This chapter focuses on Schwarzenegger's Commando (1985), the first film in which he plays a contemporary, ‘normal’ (though still unusually muscular) man: a widowed ex-special forces commando and now full-time father, named John Matrix. The act of naming this supposed he-man ‘Womb’ is only the beginning of the film's surprising and subversive disquisitions on gender. In between (and sometimes during) the expertly staged fist fights, gun battles and explosions, homoeroticism, the male gaze and gender stereotyping all bubble away under the surface. Schwarzenegger's body is presented for scrutiny in a way previously reserved for female Hollywood stars, and the film's antagonist, an embittered former colleague who is obsessed with Matrix in a way that verges on the erotic, transcends butch and enters the realms of macho camp. The film questions and subverts presumptions about the masculine and the feminine, while still delivering an ostensibly macho, quintessentially 1980s action film.