Edward Mandla
Trigeneration Update February 2014

Published On: 24/02/2014

When it comes to Trigeneration we’re rarely talking in seven digits, it’s invariably eight - multiples of tens of millions of dollars.

I remember reading a famous Harvard Business Review article from the 50s on what are the attributes of salespeople. There were two: determination and persistence.

Already the city has spent over ten million dollars on Trigeneration without one light bulb being lit. Yet this Council is continually pounded with dogged sales determination. We’re told “don’t worry let’s do this, we can do it”.

And persistence, that ability to keep getting back on the horse when you know you are going to fall, is evident in bundles with the never ending trigeneration sales pitch. “We should do this”.

There is a rebel in me. I too would like to get off the electricity grid. I too would love to power this city from renewable sources. I believe one day we will.

One of the key roles of a Board Director is to dampen enthusiasm. The staff say or are told to say “We can do it” but as a leader we say “yes you can but not today, it needs more work”. And so it is here which is why I ask for some more work from staff and less salesmanship to prove this case before we do it.

So let me go through it:

  1. I can’t see why the QVB would want to buy our cold water to power their air-conditioning. All I see is heritage issues and tens of millions in upgrades. What we’re getting is classic sales: don’t confuse selling with delivery. So let’s get beyond the sales spiel and of spending the next $640,000 and let’s ask them first. If they want it, come back to Council and we’ll look at the proposal again.
  2. As I mentioned last week, it’s hard to get a painting hung in my Chambers. Not sure how installing cold water pipes will work. We discovered last week problems with the graves under town hall and all the new infrastructure required. Let’s get heritage sign off first for Town Hall and QVB. Am I asking for two much? Let the trigeneration salespeople wait a bit longer.
  3. NSW has an electricity oversupply. NSW has no Natural Gas. New South Wales’s pipeline capacity is limited and expensive. Its generally accepted that Eastern State gas prices will continue to rise. Last week at lease one industry analyst (Peter Strachan) has said prices will double over the next 2-3 years. A key sensitivity for the project will be gas price and changes to national schemes (Carbon Tax & Renewable Energy Target) but this is not dealt with in any detail.We need to explore how much gas we need and to get some lock in prices.
  4. This Trigeneration plan can only happen if required infrastructure upgrades are carried out by Ausgrid (electricity distribution network) and Jemena (gas distribution network) to support the project. However, no one seems to have taken into account that the timeframe for these works may well be at the same time as light rail works on George Street are to occur. Therefore the capacity of either network operator to undertake City of Sydney works may be constrained, as they have to deal with major relocation works associated with the light rail project.

We need letters of confirmation from the CEO’s of both companies as to when they can complete infrastructure upgrades.

Again, let’s not rush in and sign on the bottom line until we undertake some basic prudent tasks.

Edward Mandla
February 2014

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