Coalition hands out $4 million to pursue new coal generator in Queensland

The Australian Coalition government has announced a new $4 million grant to pursue a new 1GW coal fired generator in north Queensland in one of the first acts of the new pro-coal resources minister Keith Pitt.

A joint announcement from Pitt, National leader Michael McCormack, energy minister Angus Taylor and Queensland MP and assistant minister for norther Australia Michelle Landry says the $4 million will be given to Shine Energy to conduct a feasibility study for a proposed 1GW HELE coal plant at Collinsville in Queensland.

A further $2 million will be allocated to a pre-feasibility study for a rival project, a 1.5GW pumped hydro-electric plant proposed by Renewable Energy Partners which is to be developed in conjunction with the proposed Urannah Water Scheme, and located between Collinsville, Proserpine and Mackay.

The funds are being allocated through the $10 million “Supporting Reliable Energy Infrastructure program.” It is not clear whether this is part of, or additional to,  the $10 million announced to study different generation options, including coal fired generation, that was announced as part of the Underwriting New generation Investment program in the lead up to last year’s election.

The announcement of the $4 million grant to pursue the study into a new coal generator in Collinsville comes after leading National Party and LNP figures, including Barnaby Joyce and Matt Canavan, argued for coal generators to be built around the country.

It also appears to make a nonsense of mainstream media commentary that prime minister Scott Morrison was quietly backing away from coal generation, and it follows his deal with the NSW government last week that swapped support for new transmission investment for a state government commitment to guarantee a coal supply to the Mt Piper coal plant in NSW to ensure it ran for another two decades.

“The Liberal and Nationals Government is ensuring households, businesses and industries get a fair deal on energy, keeping our economy strong,” McCormack said in the joint statement.

“We are supporting two promising new generation projects to deliver the reliable, affordable power that the North Queensland economy needs to grow and thrive.”

Taylor was quoted as saying that “an independent strategic study” has identified system strength is a real concern in central and north Queensland, and new synchronous generation is a priority to meet the energy needs of customers in the region. His office did not respond to questions as to the source of that study.

“Our plan to unlock investment in new, reliable generation capacity will increase competition, keep the lights on, and lower prices to better support our commercial and industrial sector so they can employ more Australians and remain internationally competitive,” Taylor said.

Pitt, who has campaigned relentlessly for coal and nuclear, against renewable energy targets and last year called for the Queensland grid to be separated from the rest of the national grid so it could burn more coal, said the funding would lay the platform to “help ensure that reliable, cheap electricity is available when it is needed, and will help drive down prices for businesses and their customers.”

There has been a major campaign from local fossil fuel and LNP interests in support of a new coal generator in Queensland, even though the case – on one environmental or economic basis – is weak, and the market operator predicts no supply shortfall for the state for the next decade.

Renewable Energy Partners said there is potential for the pumped hydro scheme to be co-located with 1,300MW of solar PV capacity and 500MW of wind generation and become the “battery of the north.”

There is also the potential for a 200MW PEM electrolyser to support export scale hydrogen at the project, which is being considered in conjunction with a new 1,500GL dam at Urannah. It could be delivered by 2027.

“The Hub has the capacity to deliver large scale, firm, renewable energy into the NEM by 2027. When combined with the UWS, it provides future power and water security for central and northern Queensland,” REP said in a separate statement.

“We are excited to deliver a truly unique project for North Queensland, that will provide reliable, dispatchable supply during the transition of Queensland’s economy from fossil fuelled powered generation to renewables,” REP director Luke McDonald said.

“Our initial studies have already shown that our site is well suited for solar generation, the topography is ideal for the construction of a large-scale wind farm and a recent study by the Australian Energy Market Operator has confirmed the need for a large pumped hydro facilities in North Queensland.”