Latest Daintree power report labelled "a waste of money"


Howard Salkow

Senior Journalist

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Russell O'Doherty with his wife Teresa. Image: Newsport.

A $1 million report titled Daintree Electricity Supply Study, prepared by KPMG at the request of the State Government’s Department of Natural Resources, Mines and Energy (DNRME), has been labelled “factually incorrect, lazy, misdirected, valueless and a waste of taxpayers’ money”.

In a damning assessment, Warren Entsch, the Federal Member for Leichhardt and a driving force behind introducing power to the Daintree, said there is nothing positive in the report.

This argument is validated by a KPMG conclusion that “at this time, no one option satisfies all of the Government’s objectives for the Daintree region.”

The negative rhetoric continues when they suggest its micro-grid-based solutions do not appear to be the right long-term solution for the Daintree:

  • A micro-grid would supply residents with a reliable and secure energy network; however, it presents numerous technical and commercial risks and is likely to be financially unviable without significant upfront and ongoing Government support.
  • The micro-grid options annually cost between $11,000 and $15,000 more per residential customer or, conversely, a subsidy of between $70 million and $150 million would be required to preserve customers’ current electricity costs.
  • A micro-grid presents varying levels of risk to the natural and cultural heritage values of the region, requires a high level of regulatory approvals and design work and is expected to comprise a six-year development and construction timetable.

Russell O’Doherty, president of Daintree Renewable Energy Inc. (DRE), said the outcome of the report was exactly what he suspected. “It would be skewed totally towards the outcome that the Douglas Shire Sustainability Group (DSSG) had been pushing for: and that is for the status quo to remain.”

DRE and DSSG have long been at loggerheads and DSSG expressed their dissatisfaction when the Federal Government identified the Daintree as a site for a stand-alone, environmentally-friendly power system, bringing it a step closer to powering the Daintree via a renewable-energy micro-grid.

DSSG has said it remained deeply concerned that a revised development proposal pushing for reticulated power north of the Daintree, would result in long term damage to the world heritage environment and to tourism.

Its president, Didge McDonald, has said the “new push for reticulated power ignores cheaper, lower impact; greener options and instead seems driven by a desire to encourage development.”

“This report was one of the laziest and factually incorrect I have ever seen. KPMG cherry picked bits and pieces from previous reports to come to their conclusion including a phone survey conducted by Compass Economics, something I contributed to by assisting Bill Cummins formulate the questions,” said Mr O’Doherty.

Mr O’Doherty challenged the following in the report:

“First, they didn't carry out any load use analysis of businesses or residents.

“Second, they considerably underestimated load requirements, and missed a lot of large business loads. In fact, they didn't even carry out any load assessment at all.

“Third, they underestimated the normal household energy use.

“Fourth, the amount of underground cabling required is 120km and not 160km, as stated in their report.
“Finally, KPMG has relied on trucking in either Brown Hydrogen made from coal from Newcastle NSW or Hydrogen from Brisbane or Townsville for their proposal.

“This is totally different to our proposal as we will be producing our Hydrogen on site, to fuel a single, large scale generator, not individual fuel cells, as their report seems to indicate.”

KPMG’s costing have also been challenged and it was pointed out they ignored the following: the significant Federal Government contribution; ARENA (Australian Renewable Energy Agency) can invest up to 50 per cent of renewable energy projects; and residents will get credits for any power they provide from their roof top solar that could be fed back into the network.

The report was guarded in its view of Standalone Power Systems (SPS). It said:

Standalone Power Systems (SPS)-based solutions allow for incremental staged enhancement and replacement over time:

  • Relative to a micro-grid, SPS-based solutions better preserve the existing natural and cultural heritage values of the Daintree.
  • However, there are limited short-term solutions to materially improve existing arrangements, but opportunities could exist for incremental enhancements (e.g. battery upgrade program) while other potential long term solutions are investigated and potentially relevant technologies mature (e.g. hydrogen based SPS, displacing diesel).
  • The SPS-based solutions annually cost between $700 and $6,000 more per residential customer than current supply arrangements.

“I cannot believe that this amount of money was squandered for a report that has nothing to offer. There is nothing positive, it is misdirected and is of no value,” said Mr Entsch.

But Entsch said there would be a positive long-term result. “I am expecting this to go through (micro-grid proposal) within the next 6-8 months which will be supported by a strong business case.”

Daintree resident Rob Lapaer provided the following summation: “This state government ‘study’ was a criminal waste of taxpayers’ money, just like the half a million on renaming the Lady Cilento Hospital. This ‘study’ is totally irrelevant as the Federal Government is well on track to delivering a cutting edge Renewable Energy Micro Grid for the Daintree that will finally make the area a genuine eco-tourism destination; instead of this third world mess of roaring smoking diesel generators that Mike Berwick (former Douglas Shire mayor and leading conservationist) and the Labor Government have created.”

To access the KPMG report, go to



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