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New coal plant may be Coalition price for clean energy target

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There is increased speculation that the Coalition government is prepared to spend taxpayers money on a new clean/cleaner/cleanish/not-quite-so-dirty coal plant in an effort to get conservative support for a clean energy target and even to appease potential One Nation voters.

The construction of new coal fired generator – be it in the Latrobe valley or the preferred location of north Queensland – makes no economic sense whatsoever, despite the insistence by conservatives and the Murdoch media that it will “produce jobs” and lower energy prices.

But The Australian reported on Monday that prime minister Malcolm Turnbull and energy minister Josh Frydenberg are considering offering a government-funded coal plant as the ransom to pay to get a clean energy target approved by conservative factions led by former PM Tony Abbott and Craig Kelly.

The proposal, the paper says, will be put to the party room later this month, presuming it hasn’t already torn itself apart over the issue of same-sex marriage.

The energy industry has already ridiculed the idea of a new coal-fired generator, many times over, including the big three energy retailers, the main coal generation lobby, and most energy analysts.

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Bloomberg New Energy Finance has said the economic case for new coal-fired generators existed only in an imaginary world, because their cost would be more than double that of renewables in a real one. Even the Productivity Commission has rubbished the idea of government support for a new coal generator.

But as we’ve written before, the right-wing of Australian politics has pretty much hijacked the energy debate in Australia. And it’s not just the right wing of the Coalition that concerns Turnbull and Frydenberg, but also the growing support for One Nation, particularly in Queensland.

One Nation, of course “chooses to believe” that climate change is a hoax and that renewable energy is no good, but the scary aspect for the Coalition, the state Labor government – and most others for that matter – is that One Nation is now attracting more than 20 per cent of the vote in Queensland.

The Newman government in Queensland found out, to its cost, the risk of endorsing One Nation, but it seems that the Coalition may be prepared to deliver some of their pet projects – such as a coal-fired power station in far north Queensland – even though the area is a hub of activity for new solar farms and some wind projects.

At stake is not just the Queensland poll,due in 2018, but also the next federal election, where Queensland seats could play a decisive role. As this poll shows, or purports to show, Queenslanders are convinced that renewable energy is the cause of their rising bills.

The push for a coal plant in north Queensland is considered bizarre, given the fact that the new solar plants will whittle away demand during the day, and the area’s biggest energy user – the Sun Metals zinc refinery – has itself turned to large-scale solar, because it’s cheaper, to underpin expansion plans.

But apparently their desperation is so deep that they think a coal-fired power station would supply a future aluminium smelter, a proposal promoted by the former resources minister Matt Canavan.

That idea seems idiotic, given that aluminium probably needs power less than $30-40/MWh to be competitive internationally, and this can only be delivered by very cheap large scale hydro (in Russia, Canada, or China), and because of the current supply glut which has afflicted Alcoa’s operation.

Perhaps the push to have a government-funded coal-fired power station is the conservative way of admitting that new coal cannot compete with wind and solar and storage, even with a Clean Energy Target configured to encourage black coal over brown coal.

The one remaining challenge may be to work out the smallest amount of money that could be spent to satisfy their need for a coal-fired generator.

Alpha Males and the Lump of Coal.

Alpha Males and the Lump of Coal.

Making them smaller, of course, loses the opportunity to gain economies of scale, but there seems to be no room for a new coal generator in far north Queensland anyway, not with some 4GW of wind and solar projects making their way to the starting line.

Maybe the Coalition could get away with a combustion stove. After all, treasurer Scott Morrison already has a lump of coal.

 

 

   

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  • DevMac

    Can those who worship “the market” fund it with their own money to some extent at least? It would prove that they at least believe in what they’re saying.

    If it’s good enough for you to promote it as a member of parliament, it should be good enough for you to invest in it yourself. Mr. Turnbull, what does your financial adviser tell you? Are your managed funds being directed towards coal? No? Really? Why not?

    • BushAxe

      Use their super to find it, I wonder if they’ll still be keen?

    • Stewart Rogers

      Mine is, I have invested in PNL on the ASX. Granted it’s an American coal explorer turning miner not a power plant. They simply feed coal to nearby old power plants.

  • Grpfast

    Discussion comes up from time to time of Queensland seceding from the rest of Australia. Maybe time for Australia to secede Queensland.

    • nakedChimp

      If you read the local weekly ‘newspapers’ – the ones that are free and advertising based – I find there is a 50/50 appearance of ‘idiots’ vs. ‘greens’.
      So please, don’t pull us all over the same cob here 😉

  • DugS

    Despite the idiocy of the idea in terms of value for money this is an opportunity for some serious horse trading that might break the current impasse around the CET and be better than the alternative.
    The federal Coal-ition needs a win to entice those QLD rednecks away from Loony One Nation and give the impression they have things under control. Let them have their coal fired power station so they can crow about the jobs, appease the Mineral Council, and throw a bone to Mr Murdoch. It doesn’t matter really, the thing will take forever to build and be someone else’s problem 2 election cycles away when it is clearly a white elephant. In the mean time a CET can quietly be introduced, give investment certainty to renewable energy investors and the real heavy lifting around energy can progress without the constant carping from Abbott and his mates.

    • Roger Franklin

      DugS. Agree with your message but I think the time has come to bring this small group out in the open. The system is broken and needs to be sorted out, however as George D says – at least put it in Victoria where with luck their state govt will shut things down at the earliest opportunity.

    • Barri Mundee

      Down my way in the Latrobe Valley the local media and Ian Nethercote, a former CE of Loy Yang Power (now AGL Loy Yang) who has recently returned from a trip to Germany with Minerals Council reps, have called for replacement of Hazelwood with a “cleaner” brown coal plant because we need more “baseload” electricity, apparently, and to “drive down electricity prices.

      When you are a hammer you see everything as a nail.

      Of course it would take about 10 years to build and by then the energy landscape could be totally changed. Who would build such a plant ? One Nation is not as strong as in Qld.

  • George Darroch

    Put it in Victoria. That state will have the sense to shut it when this current bunch of loons are out of power.

    • MaxG

      I wish you were right about the Looneys…

  • Paul

    LCOE is insufficient to judge varying technologies. The key is to design a system that meets a known demand and delivers the lowest cost.

    • Ren Stimpy

      “lowest cost” has to include a carbon price for the sake of investment certainty. The question is will a coal plant be able to return its investment over a 30 year period knowing a carbon pricing mechanism being put in place in the near future is very close to a certainty ?

  • riley222

    Trade you a coal power station for Snowy 2 ,a Basslink and Tassie pumped hydro.

    • Ron Horgan

      That’s transactional

  • Matthew Rowland

    So not only have these morons wasted billions with this ‘dinosaur’ NBN, they are now doing it again by building a coal fired power station. Can we have an election please?

    • MaxG

      And you believe this would change things?
      People get spoon-fed by the media; are ignorant to investigate and think for themselves; vote One Nation, LNP, are anti-green and anti-renewables…

      • Cooma Doug

        Last night the LNP voted to approve same sex marriage if held in a clean coal power station. Wonderful example of their desire for bipartizan politics at last.

  • John

    Just saying that there are already over 5000 MW of approved ‘clean coal’ or gas fired power stations in NSW.

    2000 MW Bayswater B
    2000 MW Mount Piper
    1000 MW Dalton (Gas fired)

    http://www.resourcesandenergy.nsw.gov.au/investors/investment-opportunities/electricity-generation

    Why the need to build more when there are already approved developments? (You may have already answered this)

  • David Boxall

    Right! So they build their Conservative toy. It proves uneconomical to even fire up. I guess we could do what the Philippinos did with the Bataan nuclear plant – make a tourist attraction out of it. More taxpayer’s funds down the drain!

    • Ron Horgan

      Built on a fault line and never commissioned.

      • David Boxall

        Which will rightly be the fate of any new coal plant. Different fault, similar outcome.

  • howardpatr

    Our “transactional businessman” come Prime Minister will do whatever it takes to stay in power; afterall it won’t invilve any of his Cayman Islands stash.

  • trackdaze

    Nutters.

  • bedlam bay

    One more LNP fiasco like SSM plebescite, NBN, gas and electricity prices.

  • Radbug

    Seeing the “State” fund the construction & operating costs of a coal-fired generator is the clearest concession yet that coal can’t compete with renewables. It also demonstrates that the Liberals have lost all principles. And we are so close to a credit implosion in the PRC, which means a credit implosion in Australia.

    • MaxG

      Sure, but only a handful of RenewEconomy readers know that… a minority as it seems.

  • Pete

    Was visiting friends in Port Douglas for a couple of weeks last month. They’re nearly all anti Greens/renewables but only have access to The Cairns Post and/or The Courier Mail. So they’re reading Terry McRann saying that the reason for electricity prices being sky high is because of the RET. FNQ is a lost cause.

    • Mike Westerman

      And yet some country areas are seeing farm solar installations pop up all over, so maybe it just takes longer for things to happen in the deep north.

    • john

      Pete that is very sad considering the amount of factual information that is available going back to the RET review and forward to today.

      • Pete

        They believe they’re reading factual information so don’t look any further.

    • nakedChimp

      Up on the Tablelands (Atherton) there is a 50/50 mix of nutters vs greens from my experience.

      PS: and they’re currently building a windfarm up here as well.
      Towards October there should be delivery of the things via Palmer HWY coming. Which reminds me, that I need to contact the dude of theirs again, to make sure I can watch one of them being erected.

  • Just_Chris

    They do realise to reduce emissions the new power station would have to displace an existing power station that emits more CO2. All a new state owned coal generator will do is cause the bankruptcy of an existing private coal power station. My feeling is if this gets off the ground the process around it will be very specifically designed to take forever.

  • Carl Raymond S

    Like the 30 million recently handed to Murdoch via Fox, this stinks of being a downright scam. We are being fleeced.

  • john

    I would like to see the figures that have to be published to justify the expenditure on this proposal.
    If the party that portrays them selves as the best at managing an economy can present the figures for this proposal then I will be satisfied.

  • Mark Roest

    Just say no way! This government’s right wing says they’ll hold all life hostage for a coal cash cow for their secret business partners? There are two better options:
    1. Ride the power of competition to achieve the same goals without a federal CET — just like the people of the United States are joining to fight to exceed the Paris Accords after Trump pulled out.
    2. While working on #1, educate the public about how corrupt the right wing is, sufficiently to toss them out in the next election. Then do a proper CET with no blackmail.

  • André Balsa

    The absurdity of a government funded coal fired power plant at this stage in the global warming crisis and despite the economic rationality of renewables electricity generation shows how detached from reality and self-serving Australian politics has become. And of course, neither the Australian government nor any party or politician is willing to even mention the idea of an urgently needed carbon tax + dividend scheme (such as the one climate scientist James Hansen has been proposing for many years), which would put a fair price on emissions, hence accelerating the transition to renewables, electric transportation, etc, boosting the Australian economy as a whole AND additionally would have an income redistribution effect beneficial for the lower-income families.

  • Christopher Short

    This is an excellent idea. It can sit there as a reminder that the reactionary forces are nearly always on the wrong side of history. While they are at it why not build a tourist attraction in the form of The Big Lump of Coal.

    • Ren Stimpy

      We already have The Big Half-dead Reef, but that’s becoming less and less of a tourist attraction.

  • Farmer Dave

    I understand that siting, permitting, design and construction of such a plant would take 5 to 10 years, and so I confidently predict that even if the plant were built, it will never fire up. Unless, of course, some totally imbecilic politician signs a take or pay contract with a coal mine to supply the coal. Perhaps that’s the plan – sign a take or pay contract with Adani. Adani can then use the contract to make his project more acceptable to financiers.

    We keep seeing such new depths of stupid.

    • Mike Westerman

      But fortunately we also see new depths of people power like Lock the Gate which gives you hope that rational will overcome stupid.

    • RobSa

      If it becomes a white elephant we can use its failure to push rapidly forward with the end of coal.

      • Mike Westerman

        Or a camp like out of Mad Max to send all the Luddites to.

    • DevMac

      Like the long-term gas deal with Japan which has resulted in Australian gas being cheaper to purchase back off Japan and ship back to Australia than to buy locally (also relevant to high power prices in Australia).

      Don’t bet against politicians playing the short game for their own benefit, you’ll lose or they’ll win.

  • Martin Ferguson was there at the 2009 Carbon Sequestration Leadership Forum held under the banner of the IEA sponsored Clean Energy Ministerial. This stuff has been brewing for years and every developed nation is pushing in the same direction. Have a look at the recent statements from energy ministers at the high level meeting on carbon capture utilization and storage preceding the recent 8th Clean Energy Ministerial in China. *Note: AGL never ridiculed the idea of more coal fired power stations. They actually specified that they would not support ‘unabated’ coal fired power.

  • john

    Here is an outline of the LNP candidates position for the next election.

    { All this policy uncertainty coupled with billions of dollars in federal and state subsidies to the renewables industry to help it build to scale and meet the targets, has frightened off investment in new generation, high-efficiency coal plants. }

    { The problem is overall the electricity from RE costs 2 to 3 times more than coal. }
    {The LNP supports construction of a new, ultra-supercritical coal-fired power station.}
    {The new station produces 40% less emissions than current coal generators. }
    { We need responsible practical low-cost mix of solutions, that includes coal delivering positive outcomes for budget bottom lines of households, business and agriculture.}

    That is an actual copy of some of the words in the statement.
    Now that is the kind of message being printed in media and being lapped up without any critical comment by the lamentable ignorance by the types as the Cairns Post, Courier Mail and similar outlets.
    With this message the average consumer is not going to be aware of some of the inaccuracies which standout.

    • Mike Westerman

      So true John. But where householders have put in solar, seen the savings and understood that rooftop solar is this nasty renewable energy, they get a different picture. And even more so if their land has been compulsorily acquired or accessed for coal seam gas or coal mining. We need to make sure avo farmers on the Atherton know about the impact of coal mining in the Hunter etc

      • john

        Actually there is coal north of that area, no where near the Atherton Tablelands however.

  • Hendo

    No argument – no one believes in clean coal (rightly so) and nobody wants a new coal plant, no matter how ultra ultra “clean”. And the cost is in the billions for the largely untried technologies.
    How about a closer look at pumped hydro? There is a current project west of Townsville centred around a played out gold mine. See:
    http://www.power-technology.com/projects/kidston-solar-project-queensland

    The mine has two large holes and whilst adjacent to each other have a vertical difference of about 200 metres. The flow of water from upper to lower will generate power for around 6 hours. The power to pump the water to the higher reservoir will come from solar farms. This project gets a head start because the reservoirs ate already in place as is the connector.
    But as South Australia has found recently, there are many topographically suitable opportunities for pumped hydro. On the east coast we have a line of hills (Blue Mountains) that provide countless locations for pumped hydro.
    A reasonable question would be framed around the cost of such a project. Two things to consider: first, what is the environmental cost of continuing the coal paradigm. Second, the Snowy Mountains Scheme, 1949 – 1972, cost ~$850 million. In today’s currency that is about $8.5 billion. Back then we had a population of ~8 million people, and just out of a war. Now we approach 24 million people and so talk of a medium term conversion to pumped hydro should not prove too daunting. ‘Just need a population prepared to push the elected government to do its bidding, and a government with courage.

    • john

      That project I take it is the Kidson Mine proposal which i seem to remember has found founding to go ahead.

  • john

    Perhaps the LCOE of coal wind and solar should be looked at link to clean technica site
    This article refers to Australia so please have a read.
    https://cleantechnica.com/2017/02/07/new-coal-build-expensive-energy-option-australia-bnef/

  • Rebecca

    Politicians should be held accountable for the waste of taxpayers money. It seems they play russian roulette, or is it blind folded pin the tail on the donkey. Why do we pay huge wages for no political thought. One Nation a joke

    • john

      They do get the protest vote however and as a tail can wag the dog of politics.
      As to their policy base it reads like a IPA wish.

  • Steve159

    The LNP yesterday overwhelmingly voted to hold a plebiscite … for whether we should build a government-funded coal-station.

    Or was it for something else? I get confused, so many promises, of … what did they say again?

    (paraphrasing Emerson) “What the LNP Do Speaks So Loudly that I Cannot Hear What They Say”.

  • MrMauricio

    Consumers will bear the cost of building a dinosaur energy plant for decades!!!