A $100 million federal government grant towards the long-planned development of a demonstration ‘clean coal’ power plant in Victoria’s La Trobe Valley, featuring brown coal integrated drying and gasification combined cycle technology, has been withdrawn. The move by the Gillard government could spell the end of the controversial project, with the Victorian government also signalling plans to terminate its $50 million funding agreement after HRL, the private company behind the project, failed to meet deadlines.
Energy Matter reports that the federal Minister for Resources and Energy, Martin Ferguson, said on Friday that the grant, which was to be issued under the Low Emissions Technology Demonstration Fund (LETDF), was subject to a funding agreement requiring a number of conditions. “The government made it clear in February this year that it would grant one final extension until 30 June 2012 for HRL to meet the conditions. It has not done so and, accordingly, the funding agreement between HRL and the Australian Government will be terminated,” he said.
The Greens welcomed the decision, says The Australian, after years of fighting against the project, which – backed by private investors like media billionaire Kerry Stokes – promised to generate electricity with 30 per cent fewer carbon emissions than a traditional coal-fired station. The promise of a grant to support the construction of the 400MW Dual Gas Project plant originally came from the former Howard government, with a funding agreement signed between the Commonwealth and HRL in 2008. Four extensions were subsequently granted.
“This is likely to be the final nail in the coffin for the HRL proposal, and for all new coal-fired power stations across Australia,” Environment Victoria campaign director Mark Wakeham said of the decision. “Environment Victoria challenged the EPA’s approval of the project in VCAT last year, so we’re extremely pleased with the outcome and we think there’s potential for much cleaner power stations to replace our most polluting stations,” he said.
Doctors for the Environment Australia, who last year ran a legal challenge opposing the project due to community health concerns, also applauded the move. “Toxic pollutants released from coal cause lung and heart disease, and impact on the lung function of children,” said Dr Eugenie Kayak, Victorian Chair of DEA. “Coal is also a major cause of climate change which has enormous health impacts,” she said. “It is clearly time for Australia to join other developed countries in moving away from coal fired electricity generation to safer renewable energy.”
Carbon tax: not so bad after all?
A new poll has found that far fewer voters believe the carbon price have a negative impact on them, having experienced life under the tax since its July 1 introduction. The Canberra Times reports that the latest Herald/Nielsen poll shows that while the Gillard government policy remains unpopular – as does Gillard, with the ALP vote up only slightly, and still trailing the coalition 44-56 per cent on a preferred basis – the proportion of voters who thought they would be worse off under the carbon price has slumped dramatically, while the number of those who feel it will make no difference has soared.
In the poll taken a month earlier, just before the carbon price began, 51 per cent felt they would be worse off, 37 per cent thought it would make no difference, and only 5 per cent felt they would be better off. The latest poll of 1400 people, taken from Thursday to Saturday nights, finds 38 per cent feel they are worse off, a drop of 13 percentage points, while 52 per cent feel it has made no difference, a rise of 15 points. According to the poll, Labor’s primary vote has lifted 2 points in a month to 30 per cent while the Coalition’s primary vote has fallen a point to 47 per cent. The Greens were found to have remained steady on 12 per cent.
Gassing up power prices
Australia’s increasing reliance on natural gas in its national energy mix could see consumer electricity prices soar, according to global energy consultancy AECOM. In a paper on energy price security, delivered last week during Clean Energy Week, AECOM senior consultant Dr Jenny Riesz said Australia was exposing its energy prices to volatile international gas markets via the expanding east-coast LNG export industry. “If Australia invests heavily in gas-fired generation for bulk electricity production while simultaneously developing its LNG export market, electricity prices could be increasingly exposed to international gas markets in the same way domestic petrol prices are linked to global fuel markets,” said Dr Riesz. “In addition, because these markets comprise long-lived assets with long development timeframes, any exposure of consumers to high electricity prices would likely occur for an extended period of time until more competitive generation assets were developed and implemented.”
Riesz, who co-authored the paper, called Delivering energy price security in an age of uncertainty, said the successful separation of electricity and gas prices could be achieved through continued commitment to the 20 per cent Renewable Energy Target. “Our analysis suggests that at moderate additional expense, Australia’s energy prices can be made more resilient against international market volatility and that achieving the RET targets is likely to be of high value for maintaining a diverse generation portfolio and protecting Australia’s economy.” The paper also identified additional gas price market risk factors in natural disasters and geo-political strife, citing Hurricane Katrina in the US and recent extreme weather in Queensland as examples. “We are faced with an opportunity to recognise this potential threat to Australia’s energy price security and learn from… experience,” she said.
CO2 Group sees double
ASX-listed global carbon offset company CO2 Group is predicting that its pre-tax profits will likely be twice as good as last year, with the Melbourne-based company announcing on Monday it expects its 2012 full year earnings before interest and tax (EBIT) to exceed $4 million, compared to the $2.2 million EBIT achieved for the 2011 financial year. The company said that its performance had exceeded expectations, with its planting program in WA complete and the NSW program ahead of schedule. “The Board is pleased with the projected 2012 financial year outcome and looks forward to presenting the full year results in late November,” the company’s announcement said.
In an interview with RenewEconomy in May, CO2 Group’s CEO Andrew Grant told Giles Parkinson that the company was in a great position as the “best brand in the market,” with with long-term contracts, deep expertise, and excellent balance sheet strength. “We have never lost a client, we have diversified, and that is paying off,” Grant said. “We are continuing to grow. It’s a matter of not relying on one activity.” Grant also cited “significant growth opportunities” in New Zealand, as well as south-east Asia, and said the company had “a good balance sheet for acquisition” and was looking for opportunities offshore; “our trading division is growing, our advisory business is growing. We will be able to monetise the assets on our balance sheet,” he said.
