The Greens have issued a please explain to the Reserve Bank of Australia after it entered a $10.9m contract with Trevor St Baker’s power company to provide electricity services for RBA properties.
The RBA has declined to comment on the decision to engage Sunset Power International Pty Ltd, trading as Delta Electricity, telling Guardian Australia the contract and tender process are both commercial in confidence.
St Baker, the politically connected energy baron, owns the Vales Point coal power plant in New South Wales. His private energy company, ERM Power, donated at least $197,640 to political parties over the decade to 2018 before it was sold to Shell last year – most of it to the Liberal National party in Queensland, but about $80,000 to the Labor party in Queensland and NSW.
St Baker has lobbied governments assiduously to extend the life of the Vales Point plant. The Morrison government provided a grant of up to $8.7m for an upgrade to the profitable Vales Point facility in the October budget – a plant St Baker bought from the NSW government for $1m.
The contract notice listed on Austender says the RBA has entered an energy supply agreement with St Baker’s company valued at $10.9m for electricity services for Reserve Bank of Australia properties from July 2021 to June 2024.
St Baker was contacted for comment, but did not return a call from Guardian Australia on Tuesday.
The Greens leader, Adam Bandt, declared the bank had “some explaining to do”.
“Given the RBA’s understanding of climate risk, surely they could do better than give their electricity contracts to a corporation fighting to keep coal in the system,” Bandt said.
Australia’s major banks have signed on to commitments to power their facilities with 100% renewable energy by 2030, and the RBA has made a number of public interventions sounding the alarm about climate risk.
Deputy governor Guy Debelle said last year climate change created risks for Australia’s financial stability in different ways.
“For example, insurers may face large, unanticipated payouts because of climate change-related property damage and business losses,” Debelle said. “In some cases businesses and households could lose access to insurance.
“Companies that generate significant pollution might face reputational damage or legal liability from their activities, and changes to regulation could cause previously valuable assets to become uneconomic.
“All of these consequences could precipitate sharp adjustments in asset prices, which would have consequences for financial stability.”
St Baker later blasted Debelle for sounding the alarm on climate change, branding the warnings about the risks to financial stability “totally inappropriate”.
St Baker told Guardian Australia in March 2019 Debelle lacked technical understanding of how the electricity market worked. He said Australia was a world leader in the uptake of wind and solar, and declared “wind and solar cannot support an electricity supply system’s voltage and frequency”.
“The reserve bank governor, the speeches they are making, are totally inappropriate,” he said. “The fact is in an island community, you must have at least 50% at any time of the electricity demand being supported by what we call synchronous generation, that is 24/7 power: nuclear, gas, coal-fired, or baseload hydro.”
