Coal Joy and the Base-loads – “Dancing around the Party Room”

Print Friendly, PDF & Email

“Are you prepared to build or subsidise a new coal-fired power station?” Energy minister Josh Frydenberg was asked it a thousand times. And a thousand times he didn’t answer it.

share
Australian Energy Minister Josh Frydenberg delivers his address to the National Press Club in Canberra, Wednesday, April 11, 2018. (AAP Image/Lukas Coch) NO ARCHIVING
Print Friendly, PDF & Email
(AAP Image/Lukas Coch)

“Are you prepared to build or subsidise a new coal-fired power station?”

If he was asked that question once, today, federal energy minister Josh Frydenberg was asked it a thousand times. And a thousand times he didn’t answer it.

Why is this important? Because the Coalition right wing, for whom the carbon price, the emissions intensity scheme, the clean energy target have been sacrificed or discarded, need to be told they might have one under the final, total compromise, the National Energy Guarantee.

Frydenberg is dancing a fine line – any hint of new coal generators would kill the chance of an agreement with the states, and any rejection would cause uproar in the party room.

Let’s dance!

Here are some of Frydenberg’s responses, so far…

In an interview with News Corp papers:

I would welcome a new coal-fired power station for our country because it supplies reliable baseload power and it has served us well in the past and will continue to serve us well in the future.”

“We have twenty coal-fired power stations in Australia today with an average life of 27 years. While they may not live forever, they will certainly live longer than that 27 years and the NEG will provide that level of stability for the investors and the owners of those assets.”

“The reliability that coal provides the system will be valued and [coal is] much more likely to be staying in the system under the NEG than not.”

(It should also be noted that The Australian ran a story suggesting that Frydenberg was planning an “addendum” to the NEG that would pave the way for new base-load, coal or gas. Frydenberg’s office didn’t answer that either).

At a door-stop at Parliament House:

“I have said publicly the government does not build new power stations. What we do want to do is create the investment framework for companies to take that decision as to what new assets they will build.

This is what the National Energy Guarantee will do. It will provide a stable investment framework for companies to decide where, when and what they build.”

On Radio National Breakfast, with Hamish McDonald:

“My focus is on delivering the National Energy Guarantee… what my colleagues want to see is the lowest possible prices… We will do everything possible to reduce people’s prices and increase reliability…

“We have said the government’s not building a new coal-fired power station, we’ve been pretty consistent with that …

“We are in the business of ensuring that the market works… Australia will require some $250 billion worth of infrastructure investment in the energy sector in the coming decades and government can’t provide that sort of money, it can only come from the private sector, so we need the right investment signal, and we need to dispel some of the myths in the energy system, like, for example, that we can decarbonise overnight, and close down our coal-fired power stations.

“At the same time, we are working in a carbon-constrained environment, where financiers are taking into account those issues when they’re making decisions as to which generators to fund and to build, and that is why we believe the National Energy Guarantee is the best way forward.

(HM: “But minister, can we get a straight answer to the question – it’s pretty simple – will the government rule out subsidising the construction of any new coal-fired power stations, or paying to keep existing ones open, that the corporates don’t see a future in?”)

“Well, what I’ve said consistently on this, Hamish, is that the best chance for existing coal-fired power stations, and indeed for new ones to be built, is to get the investment framework right, which the NEG provides…

(HM: But what does that mean in real terms? That the government would have a role in that, or not?)

“Well our focus is getting the market to work. That’s our absolute focus. And when you get that market working, you will get the investment in generation assets, including thermal generation assets, be they coal or gas.”

(HM: Does that mean, though, that you think that if the investment framework is right, that some corporations will see value in investing in coal? Is that what you’re saying?_

“Absolutely, absolutely. … I mean we’ve see the market operator say how important our existing baseload capacity is. … Coal is absolutely critical…

“My focus is on taking subsidies out of the system…

(HM: So you can rule out any subisidies for coal-fired power stations in the future…)

“Hamish, my clear message to you and your listeners is that with the NEG we have removed the subsidies, removed any consideration of taxes or trading schemes, we have a technology neutral approach, and we see all of the above being important in Australia’s generation mix, including coal and gas and, of course, an increasing role for renewables.”

(HM: But minister…. can you rule out that the government would subsidise any new coal-fired power stations or keeping any open?)

“Well I’ve made it very clear that we’re not in the business of building new coal-fired power stations, but if we get the market working, then you’ve got the best possible chance of sending the signal to those companies that decide what they want to build…

 

Meanwhile, Matt Canavan told Peta Credlin on Sky News on that…

“I think the reason why they haven’t been built, or aren’t being planned in Australia, is because of the policy environment we’ve got, which has put a priority on renewable energy, through the Renewable Energy Target, so it’s created no space for alternatives to be supplied, whether it be gas or coal or other options.

“The National Energy Guartantee will remove that, it will remove that priority we’ve given – at least at a federal level – to renewable energy.

And that does create the space for coal to be an option. So I think the first thing we’ve got to do is to change the policy environment we’ve got, from one being pro-renewables and pro-subsidies, to one being technologically neutral and all of the above, and then I’m quite confident, given the costs of coal-fired power relative to other power, that coal will certainly be an option going forward in this country.

(Is coal on the way out?)

Absolutely not. Because the latest and new coal fired power stations are more efficient and they can help us lower emissions.

Meanwhile, the energy industry continues to insist that building a new coal fired power station would be barking mad, for any number of reasons – costs, security, emissions.

But barking mad is what we are dealing with.

 

Print Friendly, PDF & Email

22 Comments
  1. MaxG 5 months ago

    I will probably be dead before coal subsidies are being removed… :))

    • Joe 5 months ago

      C’mon Max, you look like a spring chicken. Plenty of life left in you yet and time to see not only the end of coal subsidies but also the end of coal.

      • MaxG 5 months ago

        LOL
        I probably linked inappropriate or irrelevant topics, as it does not matter, whether I am alive of not before coal subsidies end.
        While I certainly applaud the removal of fossil fuel subsidies (I dead or alive) cannot see this happening in the mid term future.
        There are simply too many subsidies surrounding FF.

        • Nick Kemp 5 months ago

          It won’t cheer you up but apparently the Brits will be shelling out 80 billion pounds to decommission obsolete oil rigs. The owners made the money but the taxpayer pays for the clean up

          • Joe 5 months ago

            It’s always the way, Capitalism at its finest, NOT – Privatise the profits and socialise the coats / losses.

          • MaxG 5 months ago

            It won’t cheer me up, but does not depress me either; this has been going on for decades; what I refer to: privatise profits, publicise cost.
            It is another failure of governments and their Environmental Services and Regulation to increase financial assurance for remediation of e.g. mining sites. A 2016 review in QLD found increasingly small proportions of land disturbed by mining in Queensland is rehabilitated. However, the government is only asking for 0.5% to 2.75% of the assessed rehabilitation obligations. — ridiculous.

          • PacoBella 5 months ago

            The Qld Government has $6 Billion in bonds from the mining industry and plans to use the interest on those funds to rehabilitate over 100 abandoned minesites. However, there is no Industry Training Plan to train people to transition from mining to rehabilitation (which involves a much wider skill base, particularly in environmental areas).

            There are no RTOs in mainland Australia registered to deliver mine rehabilitation training. I am forming a not-for-profit group to develop and facilitate the delivery of training through a partnership between Qld Agricultural Training Colleges, SIMTARS and TasTAFE. The aim is to provide better sustainable job options for regional workers (as an alternative to just mining). If anyone is interested to get involved and further details, please contact [email protected] (apologies to you Giles if this is a bit bold!).

          • MaxG 5 months ago

            The problem goes much deeper: it is about making sure rehabilitation happens progressively, so it is not left as one big job for the end of the mine’s life, and also ensuring that we (the gov) have sufficient financial assurance every time one of those mines has been abandoned.
            6b$ is a drop in the ocean considering Queensland has more than 15,000 abandoned mines. This means 400k$ for each. Really?!

          • MaxG 5 months ago

            Have a look at this (http://www.abc.net.au/news/2015-09-19/taxpayers-may-foot-bill-for-mine-rehabilitation/6787954); supporting my stance, and talking about how inadequate it is to have 1.5% of assurance for the cost of rehabilitation. Again, the public gets shafted.

            note this: “Instead, what we see are mines placed into care and maintenance where the mining companies can avoid paying out rehabilitation bonds because the mine isn’t officially closed.”
            — Just another rort by the corporations.

    • Joe 5 months ago

      Correct me if I am wrong but isn’t electricity an essential service that is the responsibility of the Sates and the Territories to deliver and so building new power stations is under their control. Yet we have The Federal Coalition buying back The Snowy from NSW and Victoria so that they ( The Feds ) can build Snowy 2.0 and possibly more into the future. Doesn’t this then make The Fed Govt. a player in the energy market. For The COALition to go and build a new Coaler/s would be in direct competition with Snowy as well as all the other players in the market. Coalition ideology notwithstanding, I just can’t see them building a New Coaler, its not commercially viable, taxpayers money being pissed away on a stranded asset.

      • Peter Campbell 5 months ago

        You seem to be making the mistake of thinking that reason and logic might play a role in LNP policy.

        • Joe 5 months ago

          Thanks Peter for bringing me back into reality.

      • MaxG 5 months ago

        “taxpayers money being pissed away on a stranded asset” isn’t this today’s way of doing things?

  2. Joe 5 months ago

    I love the title to this article which I think is a play on ‘Col Joye and the Joyboys’.

  3. howardpatr 5 months ago

    “BARKING MAD”; now that is a term so applicable to Mad Monk Abbott and his fellow deniers of the findings of climate scientist and who steadfastly stand in the way of the renewable energy future.

    Meanwhile Turnbull and Frydenberg play footsies with the LNP deniers.

  4. George Darroch 5 months ago

    This is what we have come to expect from Josh “Burn the World” Frydenberg.

    • Ali Dee 5 months ago

      Frytheberg!

  5. JIm 5 months ago

    Technology-neutral is taking a battering, but it wouldn’t look great at COAG to be defending a brand new coal subsidy!

  6. Farmer Dave 5 months ago

    “… myths in the energy system …. that we can decarbonise overnight.” This is a common claim by Josh Frydenberg, and I think this a straw man he makes up to deflect attention from how very little his government is doing to get us off fossil fuels. I’m a bit of an energy transition nerd: I read a lot and listen to a lot, and never, ever, have I heard anyone saying that we can get off fossil fuels overnight. It really shits me that politicians treat us with such contempt that they come up with crappy straw men arguments like this. There is no such myth.

    It also shits me a lot that the media let him get away with it. Josh is a serial offender on this matter and I have never heard him called out on it. What’s wrong with asking him for details?

    Finally, just think about an environment minister saying they would welcome a coal fired power plant. WTF? Just those words have shown that his is totally unfit for office.

    • Mike Westerman 5 months ago

      It’s certainly not the speech of a leader, one trying to provide “investment certainty” since all one can conclude is that the policy will definitely change if the government or even the leadership of the LNP changes! So not only dishonest, but useless in a policy sense as well.

      But apart from that, what is clear that no only is the change happening at an accelerating pace, but that the incentives to drive it faster are also increasing. The domestic sector is installing solar and will continue to do so at an increasing rate because the price of power cannot fall fast enough to act as a disincentive. The surpluses of power during the day will begin to make a compelling case for thermal storage as the cheapest way to usefully soak up excess capacity, but in shoulder seasons market prices will crash and force FF generation out of the market, some for good. Increasingly solar farm developers are pairing it with means of firming some of their output and this will also deepen as the daytime spot market hollows out.

      So Frydenberg in trying to appease the intransigents will only end up frustrating the market.

  7. Ertimus J Waffle 5 months ago

    For all the dreamers and Coal Deniers here this is the future of power generation.
    “The Japanese government is moving ahead with its plans to build up to 45 new coal fired power stations.

    Japan plans 45 new high-energy, low-emissions HELE coal fired power plants. ( ABC News )
    The power plants will utilise high energy, low emissions (HELE) technology that use high-quality Australian black coal.

    Japan is the largest overseas market for Australian coal producers, taking more than a third of all exports.”

    • Robert Comerford 5 months ago

      More correctly… High emissions. Low energy.
      Waffle is right! Do I assume your real name is Tony?

Comments are closed.