Coalition not interested in coal, just stopping new wind and solar | RenewEconomy

Coalition not interested in coal, just stopping new wind and solar

Coalition isn’t really interested in funding new coal fired power stations, it wants to destroy investment in renewable energy and agencies responsible for driving the transition away from coal.


The Government isn’t really interested in funding new coal fired power stations, it wants to destroy investment in renewable energy and the agencies responsible for driving the transition away from coal.

Prime Minister Malcolm Turnbull and Environment and Energy Minister Josh Frydenberg are two intelligent individuals who both have experience in the world of finance.

They understand that when every potential private investor in coal-fired power says they aren’t interested, it makes it virtually impossible for another coal-fired power station to ever be built in Australia again.

But they also think the politics of climate change and energy means renewable energy is enemy number one.

Their latest idea about allowing the Clean Energy Finance Corporation to invest in coal power is a part of an ongoing campaign to destroy renewable energy investment in Australia. This is happening even as the CEFC has invested more than $2 billion in renewable energy, energy efficiency and renewable energy technology, while making a return for tax payers.   

There are several big hurdles that prevent the CEFC from investing in coal.

First, the Government would have to stop expecting the CEFC to make returns for the taxpayer.

The Government, through an investment mandate, requires the CEFC to make a return on its investment.

When the Coalition came to Government it increased the required rate of return.  The CEFC has continued to meet this higher requirement and has invested more than $2 billion in renewable energy, energy efficiency and renewable energy technology.

If the Government wants the CEFC to invest in coal power, the CEFC would have to invest knowing that it would never recoup taxpayers’ money, let alone earn a return on it.

Second, there would need to be an investment partner.

The CEFC doesn’t invest in projects on its own, it strategically co-invests.  Therefore it would logical that any new coal fired power station would need a proponent and other financiers to approach the CEFC as a partner. There is simply no appetite for this type of investment in Australia. As the CEO of CS Energy, one of the biggest generators of coal-fired power in Queensland told ABC’s 7.30 this month, “it would surprise me greatly if there was any more coal-fired technology built in Australia”.

Finally the Government would need to rewrite the legislation of the CEFC, allowing it to invest in coal-fired power stations.

Even if these changes were made and challenges overcome, the board of the CEFC still makes the final investment decision on projects.

In all likelihood, the current board will choose projects in renewable energy that earn a return for the taxpayer rather than projects in coal that will lose them money.

If they didn’t, what kind of responsible board would they be?

Apart from the financial implications, the Australian Prudential Regulation Authority, a central regulator of Australia’s financial system, just last week warned that financial institutions must be aware of the liability of company directors and the disclosure requirements in relation to the risks of climate change.

Board members of the CEFC must also take climate risks into account when considering which investments to tick off on.

The terms for the majority of CEFC board members expire over the next two years, so the Government could replace them with more agreeable individuals, or leave their positions vacant so the operation of the agency grinds to a halt and no projects are approved.

We’ve seen this happen already with one agency, the Climate Change Authority.

This would be a sad waste of valuable expertise, sacrificed for political expediency.

Even if all the above machinations occurred, it is still unlikely new coal-fired power stations would be built, then but neither would any renewable projects receive funding and Australia’s energy transition would dramatically slow.

The CEFC managed to ride out the Abbott years and one would have thought the organisation’s odds of survival would have improved under Prime Minister Turnbull and Energy Minister Frydenberg.

However, since Turnbull assumed the leadership the Government has partially defunded the Australian Renewable Energy Agency and has now turned its sights on the CEFC.

The innovation nation that Prime Minister Turnbull envisioned continues to retreat further into the background as the politics of energy begins to engulf a successful and respected institution.

The Prime Minister and Minister Frydenberg are smart enough to know that new coal-fired power stations will never be built in Australia.

But the debate might help destroy a successful national institution and with it Australia’s ability to accelerate its energy transition and appropriately deal with climate change.

Matthew Rose is the Australian Conservation Foundation’s economist

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  1. George Darroch 4 years ago

    All of this is quite bizarre. What are they trying to do?

    • trackdaze 4 years ago

      The coal industry is desperate and on a precipice. Whilst it still has some cash its donating & lobbying hard. Last throw of the dice before its to weak to fight.

      With energy players and financiers gravitating to renewables and storage with about 1gw of renewables and 200Mw of storage likely this year it is game over nationally.

      Wont be long till SA is exporting bulk excess amounts of renewables to eastern states.

      Internationally its looking even worse.

      With the US (now powered by less than 30% coal) at an international advantage if it were to apply a carbon tax&tariff….. this will force china and others to apply its own. This inturn would speed up the rate of decay in coal.

      Big trouble is little OZ.

      • solarguy 4 years ago

        So the carbon war is far from over. Hitler did this sort of capper near the bitter end of the war refusing to acknowledge defeat, with the only difference in this story is that the FF masters have such willing and deluded generals and their prepared to make us all suffer. Bastards!

        • trackdaze 4 years ago

          the allies felt it better that hitler remained in charge and not targeted as he was seen as more an asset to the allies than a liability.

          I can see absolutely positively iron clad no parallels at all with the current goings on in federal parliment presently. 😉

          • solarguy 4 years ago

            That fact, is irrelevant! As to the fact I mentioned, that Hitler thought he could still win the war in dying stages.

  2. solarguy 4 years ago

    So what could possibly be their motive for this madness if their coal buddies aren’t interested?

    • Barri Mundee 4 years ago

      I do not think this article is clear on MT/JF’s motives. Do they want to protect the investment of existing FF generators? That would make some sense. Existing private and government FF owners must see increasing renewables as a threat to their future if not their current profitability.

      • trackdaze 4 years ago

        I wouldn’t discount they are protecting network operators from behind the meter distributed energy.

      • solarguy 4 years ago

        Barri, You have a good point. I suppose it would be clearer if we knew how many owners of coal plant have recently made their investment and haven’t or aren’t going to break even.

    • Chris Fraser 4 years ago

      Mal and Josh have discovered that, since no one will play the game their way, they must resort to hiding the ball …
      For their unsportsmanlike attitude, they can have all my copies of the dog turds with eyes … ????????????????

      • solarguy 4 years ago

        Nice touch Chris!

  3. DevMac 4 years ago

    It only makes sense in political terms, creating a difference between the two major parties. Australian Politics is as low as it’s ever been.

    • solarguy 4 years ago

      If that’s it, then lower than shark shit. Insane!

      • DevMac 4 years ago

        The only thing I can possibly think of, and it’s still political at its core, is that the Australian economy would be too shaken up by an immediate pivot towards renewables.

        It’s all economics, which is about as imperfect as any university subject can possibly get. Pet economists are aplenty on both sides, so statistics and predictions can be cherry-picked for whatever outcome keeps your wallet the fattest.

        Coal prices dive, mining companies go under after shedding boat loads of jobs, all dire predictions that no politician can ignore. The flipside is that the renewables industry could be able to pick up the slack and be flush with all the funds being drawn out of coal stocks and invested into renewables.

        The current economic system is dependent upon slow change, it’s conservatism that’s “baked in” to the system.

        No easy answers, you can’t argue with physics and the whole “the economy is a wholly-owned subsidiary of the environment”, but humans are lazy creatures of habit who don’t want to part with any of their lifestyle inflation plans, and they’re the ones entrusted with the vote.


    • DogzOwn 4 years ago

      Somebody recently said on LNL that it’s never been possible, for the broad church inside all conservative parties, to agree what they really stand for. This is why they’re left with just being “not Labor” for all issues.

      At least Phoney Tony stopped at that. But, especially since Trump, it’s not so simple, a complete fog of maybe not this our that and “correcting” one another, with smugly grins all around.

  4. howardpatr 4 years ago

    Innovation Nation Turnbull – what a joke.

    Turnbull is so bad?mad he might even succumb to pressure from Mad Monk Abbott and make arch climate change denier, Maurice Newman, the next chair of the CEFC.

    • DevMac 4 years ago

      Two great examples of innovation from Malcolm:
      – Coal over renewables
      – Copper over Fibre

      It hurts.

  5. Kevan Daly 4 years ago

    Nobody’s going to invest in fossil fuel plant while the LRET scheme is in place. However if the Coalition managed to scramble together the numbers in the Senate for its abolition it wouldn’t help- because it would just create uncertainty for all forms of energy investment.

  6. Malcolm M 4 years ago

    A recent 7:30 Report program asked the question “Where’s this push for coal coming from ?”. The only proponent they could find was the Minerals Council of Australia (who had also lent the piece of coal to Scott Morrison to use as a prop in Parliament). Their position was that coal is Australia’s second biggest export, and that we need to build the ultra-high-efficiency coal-fired power stations that are currently being built in Asia. The coal industry is probably concerned about our steaming coal export market drying up, and that a new coal-fired power station in Australia would increase confidence in new coal-fired power stations being built in the Asian market.

    I suspect there was a big donation from the Minerals Council of Australia to the LNP before the last election, and now the LNP need to look as though they are returning the favour.

    • Ken Dyer 4 years ago

      The supreme irony in the Adani coal saga is that should it ever get off the ground (shudder) every tonne of coal imported into India will attract import duty of 400 rupees. Whilst this does not seem much, it has to be added onto the current estimated cost of Adani coal production ($86 per tonne). So that amounts to about $94 a tonne, and it still has to be transported to India, shipped onto the current pile of surplus coal in India – about 300-400 million tonnes I think, then eventually burnt. It has to eventually cost over $100 per tonne before it generates a scintilla of electricity.
      And where does a portion (about 40%) of that import duty go? Why, straight to the indian Clean Energy Fund.
      And you can apply exactly the same logic in Australia, only add on the capital cost of new black power stations. The mind just boggles.

    • DogzOwn 4 years ago

      Is it time to consider coal like a drug of addiction? If we need profitability of exports is what it’s all about, why not expand and export other industries, like real drugs of addiction heroin etc? Or maybe, is it the eally big sting, his friends at Goldman Sachs, prepared to finance anything, even coal, as long as risk scarred by taxpayers.

  7. Radbug 4 years ago

    Lithium-sulphur will be commercially viable by Christmas 2017. Australia lacks the generation capacity to power it. What happens then? More USC??

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