One of Australia’s richest coal barons, Trevor St Baker, has again rattled off a series of dubious predictions about the energy sector, suggesting that Australia’s fleet of coal-fired generators could effectively remain operational forever, and suggesting the ACT government is to blame for the closure of a South Australian power station.
Trevor St Baker is chairman of Delta Electricity, owners of the 1,320MW Vales Point coal-fired power station, and made the comments during a panel at this week’s AFR energy summit in Sydney titled ‘The future of coal in the energy mix.’
The one-time National Party candidate and financial backer of the Queensland Liberal National Party has the ear of both the Prime Minister and federal energy minister Angus Taylor, which is a cause for concern when the coal baron promotes such a questionable assessment of the future energy system.
As Morrison did in his speech to the United Nations General Assembly last month, St Baker suggested that Australia should be praised for being a global leader in the uptake of renewable energy. But he also believes that solar and wind generation will represent no more than a quarter of global electricity supply.
“We’re not in a different planet to what we’ve been shown the rest of the world’s been doing,” St Baker said. “The rest of the world has got 4 or 5 per cent sun and wind. Sun and wind is not going anywhere above 25 per cent anywhere soon”.
Federal energy minister Angus Taylor used the same ‘threshold’ in an earlier address to the summit.
St Baker cited the research of global energy giant BP presented during an earlier session of the AFR summit, which based its assessment on primary energy use, including energy used for transport and industrial use.
As a measure, using a comparison of primary energy use can misrepresent the amount of ‘useful’ energy derived from different sources, as a calculation of primary energy production excludes efficiency losses in fossil-fuel electricity generation, or combustion in vehicle engines. In fact, it multiplies it by a factor of three.
That same research shows the penetration of renewable energy approaching 30 per cent in every major global region by 2040, on a trajectory to surpass the market share of coal. The research also showed renewables providing the majority of the European electricity supply, in a scenario that does not include governments deciding to take ambitious action on climate change.
While there has been ongoing speculation over the future of many of Australia’s largest coal-fired power stations, particularly the Liddell, Yallourn and Callide B power stations which all have approaching expiry dates, Trevor St Baker believes that he’ll be able to continue running the Vales Point power station effectively indefinitely.
“There’s no natural life to a coal-fired power station. The natural life is the availability and access to an economical fuel,” St Baker said.
“I own a 40-year old power station, a unit of which just broke a record for continuous operation.”
Despite this, data compiled by The Australia Institute shows that the Vales Point power station has suffered a total of five outages since the think tank began tracking power station reliability in December 2017. The Liddell power station, which is slated to close in 2023, was the only power station in NSW that had a higher outage rate.
St Baker also appeared to blame the ACT Government, which has recently achieved its target of sourcing 100% of its electricity from renewable sources, for the 2016 closure of the Northern brown coal-fuelled power station in South Australia.
“It was a delinquent act of the South Australian government in allowing a 35-year old [Northern] power station to close because the ACT Government was going 100% renewable, but by paying for people to build wind in South Australia.”
Trevor St Baker, along with business partner Brian Flannery, acquired the Vales Point coal-fired power station, which will turn 50 years old in 2028, from the NSW Government for $1 million in 2015. Just two years later, the revalued plant was estimated to be worth more than $700 million, after a surge in wholesale electricity prices.
Following St Baker’s comments to the AFR Energy Summit, the Grattan Institute’s Tony Wood delivered a healthy dose of reality, echoing the think tank’s proposed plan for Australia can manage the inevitable retirement of the country’s fleet of coal-fired power stations.
“We have an incredibly interesting outlook. We’ve got 20 to 30 years of coal plant life in this country. This is a manageable process if we get the policy settings right,” Wood said.
“Those plants will shut in the not too distant future, and that will be the end of that era and we will move on to a different era.”
“Newcastle is the largest coal export hub in the world, and the community there is not questioning whether that’s going to happen. The community there is questioning how they are going to make the transition. The Hunter Valley has a great future for exporting coal for a while yet, but now is the time to be planning for a process of phasing out fossil fuels.” Wood added.
A recent research report from the Grattan Institute stressed both the inevitability of a transition away from coal by mid-century, as well as the need for stable and forward looking approaches to retirement planning and investment to ensure the transition is not unnecessarily disruptive.
Australian Energy Council chief executive Sarah McNamara told the conference she didn’t see the concern in balancing the ongoing operation of coal-fired power stations in Australia, with the international greenhouse gas reduction targets that Australia as committed to.
“Coal is going to play an important role in our energy mix into the future, until 2050, and I don’t think there is anything to be concerned about. I just don’t think it is helpful to be either pro-coal or pro-renewables, we should be technology-neutral,” McNamara said.