Coalition's "clean coal" plan to power Gina, Clive, Adani in Galilee basin | RenewEconomy

Coalition’s “clean coal” plan to power Gina, Clive, Adani in Galilee basin

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Coal generator proposal asking CEFC for finance would provide power to Galilee Basin coal projects owned by Clive Palmer, Gina Rinehart, and Adani, and bury Co2 in “un-mineable” part of same coal province. Meanwhile, emissions rise and Coalition links with fossil fuel lobby deepen.

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The so-called “clean coal” power generator being promoted by the Coalition has been revealed to be a 2009 proposal from businessman Clive Palmer that would be used to help provide electricity to Galilee coal mines planned by Palmer himself, Gina Rinehart, and Indian group Adani.

Waratah Coal, the company owned by Palmer’s Mineralogy, confirmed to the ABC on Tuesday that it had made an application to the Clean Energy Finance Corporation last Friday to finance a proposed 900MW coal generator that proposes to use an unproven technology, carbon capture and storage.

Coal is stockpiled before being loaded on to ships at the RG Tanner Coal Terminal in Gladstone, Friday, Jan. 20, 2012. The Terminal plays a vital role in delivering coal supplies to foreign markets. (AAP Image/Dave Hunt) NO ARCHIVING

The revived plan was originated in 2009, and the details can be found here. It proposed to bury the emissions from the coal plant under the very same coal province that the three mining groups propose to mine – except that it will be “sequestered” in an “un-mineable” area of coal seams some 1km underground.

The $1.25 billion figure comes from its 2009 estimates, but it is expected that this is well out of the ball-park now. It also does not, the application makes clear, include the cost of carbon capture and sequestration.

No plant in the world has come close to making this a commercially viable proposition and the owners of the most advanced project, Kemper in Georgia, now admit it would be impossible make money from coal generation and CCS.

But that hasn’t stopped the Coalition continuing to push “clean coal” over renewables, despite overwhelming consensus that it would cost at least twice as much – and possibly four times as much with CCS – than wind and solar alternatives.

Prime minister Malcolm Turnbull – who as recently as 2010 supported 100 per cent renewable energy scenarios – has now pitched the Coalition’s energy policy firmly behind the construction of new “ultra supercritical” coal plants.

Resources minister Matt Canavan has been particularly vocal in support of a new coal-fired power station in north Queensland. This proposal, from Palmer, is the only proposal in the pipeline. Most other energy investors in the area are instead looking to solar and wind farms.

This comes as new data shows that Australia’s greenhouse gas emissions continue to rise, jumping another 2.2 per cent in the last financial year and taking the growth since the repeal of the carbon price to more than 7 per cent.

Much of this growth has come from the electricity sector, due to increased coal-fired generation, and from the new LNG export facilities in Queensland, where more coal and gas is being burned to power the liquefaction of coal seam gas, so it can be shipped overseas.

New studies have again questioned whether coal seam gas is any “cleaner” than coal power, given evidence that “rogue methane emissions” which are not measured by the gas companies, are actually making CSG a dirtier power source than coal.

And meanwhile, the Coalition’s ties with the coal lobby have deepened. Sid Marris, a former analyst with the Minerals Council of Australia, and a 16-year veteran of News Ltd,  has joined Turnbull’s staff as an advisor.

This week, the chairman of the Minerals Council of Australia, the most vocal coal lobby group, Vanessa Guthrie, was appointed to the ABC board despite not making the shortlist prepared by an independent panel.

The Minerals Council, it has been widely reported, supplied the lump of coal brought into Question Time last month by treasurer Scott Morrison, in the middle of a record-breaking heat wave. The coal was lacquered so Coalition ministers and MPs would not get their hands dirty.

The proposed coal-fired power station in the Galilee Basin reveals the farcical depths of Australia’s energy policy debate. Even the Energy Supply Council, which represents the country’s fossil fuel generators, admits that new coal power is now “un-investable”.

The Coalition wants such coal plants to be funded by the Clean Energy Finance Corporation, but this has been dismissed on several occasions by CEO Oliver Yates, who points out that co-financiers would be impossible to find, and any such investment would require billions of dollars in government guarantees and indemnities against a future carbon price.

The Minerals Council, though, is pushing the Galilee coal basin hard. It has previously fought against a carbon price and has launched numerous campaigns to promote coal as a commodity.

The 2009 proposal suggests that the coal generator could be built in two stages, one a 450MW unit and then another to follow. It then proposes to inject the Co2 into deep underground coal seams.

“The favourable findings from overseas studies, together with presence of deep un-mineable coal seems (i.e. approximately 1,000 m at a distance of 20 kms from the proposed power station) within the Galilee Basin highlights the definite potential of the Galilee Basin to develop into a large-scale geosequestration opportunity to support a coal-fired power station,” the project documents say.

It also indicates that the proposal relies heavily on the anticipated “500-600 MW” growth in electricity demand over coming years “as production from surrounding mines increases to meet future ore exports.”

These clearly relate to the proposed Adani and Rinehart mines. But there are now questions over the future markets for such coal, given the downturn in China demand and the change in the India coal supply situation.

Adding to this, at least three large-scale solar plants, and one solar-wind hybrid, are planned for the north Queensland region, including one 116MW plant to be built by zinc refiner Sun Metals in response for the high cost of coal and gas-fired power through the Queensland grid.

Waratah Coal manager Nui Harris told the ABC on Tuesday that the new expression of interest was prompted by recent statements by Federal Energy Minister Josh Frydenberg. “He said we should consider carbon capture and storage as part of the clean energy mix.”

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  1. Chris Fraser 4 years ago

    The coal doing the rounds of the Government front bench was lacquered so politicians would not get their hands dirty. I like that. Then perhaps it’s too late to advise the Treasurer that coal was partly responsible for 1500 heat-related deaths during the heatwave occurring just outside. Especially since he said that ‘coal can’t hurt you’ while he spoke in air-conditioned comfort. Ah the irony.

    • Brunel 4 years ago

      I was wondering if it was varnished.

      Thanks for the info Giles.

  2. George Darroch 4 years ago

    Did I miss the first month of Autumn?

  3. solarguy 4 years ago

    Just one word about the coalaltion……”INSANITY”

  4. JIm 4 years ago

    So Malcolm Turnbull wants to siphon tax revenue from a non-coal State like South Australia (and elsewhere) to squander in Queensland, to create some R-W PC action to go with his silly song and dance routine on renewable energy solutions in my home State. That’s very sad for SA Liberals!

  5. Andy Saunders 4 years ago

    Hmmm, I find the comparison “CSG is just as bad as coal” unconvincing. Methane emissions from coal mining are equally un-measured, and I suspect substantially more than CSG.

    There also seems to be a confusion about gas leaks in distribution – leaks from this reticulation are independent of the source of the gas. It might (I have no idea) well be sensible to shut down gas supply to entire suburbs/cities, but I think we’re a long way from that point yet.

    • Tim Forcey 4 years ago

      Hi Andy:

      Fossil gas, when used to generate electricity, might be as climate-damaging as coal. We just don’t know. Even the UN is asking questions.

      “Reliable measurements on Australian oil and gas production facilities are yet to be made.” CSIRO Day, Dell’Amico et al. (2014)

      “there has as yet been no comprehensive, rigorous, independently-verifiable audit of gas emissions.” (Univ of Melbourne 2016)

      “In company reports and in the national emissions inventory… emissions from… the extensive network of gathering lines, compressors and pumps… are set at zero. Consequently it is probable that official data on total GHG emissions rising form the production of coal seam gas significantly understate the true level of emissions.” (Univ of Melbourne 2016)

      “There is effectively no public information about methane emissions associated with unconventional gas production in Australia. This is a matter of some public policy concern…” (Pitt & Sherry)

      “Current estimates are made using methods for the conventional gas industry and do not take into account factors in the CSG industry…” (NSW Chief Scientist)

      “[We] recommend that Australia make efforts to improve the data for the emissions from this category, including the development of updated EFs that represent production activities in unconventional gas production.” (The UN 2016)

      Renewable energy is cleaner than fossil gas. That we know.

      If you would like to set up your home to use heat pumps etc. and zero gas, see here:

    • aussiearnie 4 years ago

      Actually there has been some work done on measuring methane emissions from coal mining: Also since it is a safety hazard generally mines have methane management in place, and some run generators on that mine gas (Tahmoor 40MW, Bulli has them too).

  6. Chris Baker 4 years ago

    Meanwhile Adani is preparing to schmooze the Qld Premier and 5 mayors from the councils around the Galilee Basin area. They don’t need to go any further than their own backyard to see what a coal mine looks like. Instead they’re skiving off to India for fancy dinners — now why they would want to do that?

    • lin 4 years ago

      Blackmail and bribery opportunities. Everyone’s a winner, except the Australian citizens and taxpayers. And they wonder why everyone hates them.

    • Ken Dyer 4 years ago

      Given the way, the Queensland Labor Government is supporting the Adani coal mine, yet have committed no funds, don’t you think it is an election ploy to get re-elected in such sensitive electorates like Rockhampton and Townsville, and to gazump the Ginger Whinger? Until they put their money where their mouth is, I remain unconvinced that the Adani tapdance is nothing more then political window dressing, and the same goes for the COALition. It’s a catch 22, Adani won’t start until they have some money, and the Queensland Government won’t cough up until Adani starts to wave some cash around.

      • Chris Baker 4 years ago

        I think you’re right Ken. There’s no way this project will ever get off the ground. Its a stalemate and will stay so. Adani is building the world’s biggest solar farm in India (if my memory is correct), so I think they know on which side their bread will be buttered and its not coal.

  7. DJR96 4 years ago

    It’s simply and clearly “un-investable”.

    There will never be another coal-fired power station built in Australia ever again.
    Sadly it’s the very politicians responsible seem to be the last people to realise this.

    $1,250,000,000 could buy a lot of renewable generation and storage…….

    • Steve159 4 years ago

      It could be a pyrrhic victory, should the power station be built – at enormous cost to taxpayers.

      In some respects we should welcome the squandering of taxpayer funds on such a stupid project.

      It would seal the disapproval of the LNP, irrespective of however much they spin it.

  8. lin 4 years ago

    I wonder how many coal-lick-a-thon politicians and their minerals council handlers would back this insanity with their own hard-earned cash?
    How about we tie their superannuation to the success of this project? If they stand to be personally penalised for backing a dud, they might apply a bit more due diligence than when it is our money they are pissing against the wall.

  9. Ken Dyer 4 years ago

    Given the way Clive Palmer plundered his Queensland nickel mine, treating it like his personal piggy bank as the SMH described it, one has to suspect how that $1.25 billion would be spent. Clive Palmer has form when it comes to ripping off the worker (and taxpayer).

    • Mike Shackleton 4 years ago

      Anything that has Clive Palmer’s name on it should be treated with extreme suspicion.

  10. Brunel 4 years ago

    Even if the ALP and LNP are stupid enough to pay for it, how would it help SA – unless there is a UHVDC transmission line to Adelaide.

  11. Radbug 4 years ago

    China is the elephant in the living room. The only reason why global growth has been positive at all in the last ten years has been Chinese economic activity. Now the Chinese 20-50 yo demographic, the “spendalot” demographic is in steady decline. Debt-based investment has replaced “spendalot” demand. Much of this debt-based investment is in renewables (plus lots of stranded assets). Anaemic growth plus heavy investment in renewables. This is not good news for the Australian Coal & LNG Exporters.

  12. Miles Harding 4 years ago

    CCS, really? I guess i’ll believe it now.

    1) This means that the build price is a total fantasy, it’s likely to be 5 or 10 times the estimate, or the plan is abandon the capture and storage part after the plant is built.

    2) It’ll be very expensive to fuel and operate, likely several times that of 2030 wind and solar.

    3) What makes them think that a suitable place to sequester, what will be an enormous amount of carbon dioxide, is right under the power station? Actually far enough away that the inevitable CO2 eruption won’t undemine the footings and cause the station problems.

    True to LNP form here.

  13. dorsett 4 years ago

    Probably putting too fine a point on it, but the way-over-budget and behind schedule Kemper plant is in Kemper County Mississippi, more than 100 miles from Georgia.

    Georgia has more than it’s fair share of way-over-budget and behind schedule nuclear plant projects under construction at Vogtle, but no CCS projects… yet. 🙂 (If the regulators keep on approving the cost overruns, they’ll keep pouring money into it, for the benefit of the shareholders, if not the ratepayers.) The pair of Westinghouse AP1000s under construction in Georgia are going up so slowly and expensively that the financial risk is pushing Westinghouse owner Toshiba to the brink of bankruptcy, causing the CEO to resign in recent weeks (!).

    The fate of Kemper’s developers may follow a similar track (or not). It’s complicated, and there are US government guarantees to AT least some of the financing, but nobody will walk away un-scarred.

    It would be insane to try to mimic than in Oz (as if anybody would dare to finance it at all.)

    • john 4 years ago

      There seems to be a strong push to get this proposal up and it is to be financed by a body that has a charter to finance Clean Energy.
      The charter has to be changed unless some kind of coal fired generator setup can be defined as CO2 emission free.
      In the era we are now witness to newspeak no doubt that will be the line taken.
      As to the economics it would appear from every study done that new coal in any form is not competitive on price.
      The only way around that little problem is to pay the generator a set amount to bring the price back. Who pays for this?
      The taxpayer of course to get another FIFO resource development off the ground up and running.
      So that takes care of the power but who is going to finance the proposed mines rail and port?
      First off the banks will need to see the future earning figures.
      Very difficult to see how these can be produced let alone actual contract price of product when both China and India are trying to curb imported thermal coal.
      At the moment there is a price surge in product value is this going to stay the same?

  14. Rebecca 4 years ago

    Are tax payers funding Annastacia Palaszczuk plan to take five Q.L.D Mayor’s to India to meet with Adani. Guess that would be a yes.

  15. aussiearnie 4 years ago

    In order for the CEFC to even consider investing in this, there needs to be:
    – another commercial investor – CEFC can’t “fund” a project;
    – a much larger risk appetite than current;
    – an allowance to invest in CCS
    I don’t think CCS can conceivably fall under the Clean Energy Innovation fund.

    In looking at a the risk:
    – the Boundary Dam project is the only operational large scale pre-combustion capture project in the world, but this is not a power generation project (source: GCCSI);
    – there are another six projects, but half of these are still in early planning stages and only four are for power generation (source: GCCSI);
    – there are no projects that store CO2 in deep coal seams in operation as far as I can see. The only project I can find is the Burlington Resources pilot project in New Mexico, which is an Enhanced Coal Bed Methane (ECBM) project, i.e. pumping CO2 into coal seams to produce methane (source: GCCSI) ;
    – CSIRO was doing some research in ECBM mainly targeting China.

    I think it would be fairly safe to assume that the Directors of CEFC would not recommend investing in this project. I note one Prof (!) Clive Palmer being named in the document, and most of the information in it is superficial and aspirational. There is no hard data to gauge whether or not this project is technically feasible at all. Given the way Wandoan and ZeroGen went in Queensland, I don’t think it has a snowball chance in hell to get funding from any rational investor.

  16. Michael Rynn 4 years ago

    Business wise, its using the coal power station to justify the coal mine, and using the coal mine to justify the power station. To pay for the power station, vast amounts of coal have to exported, with carbon emission consequences. “Not Clean Coal, Not Cheap, but Good for Gina, Clive and Liberal Party Fossil Fool Investors” Stop Adani Now.

    As Solar is cheaper than “Laundered Coal” we don’t need a coal mine any more.

  17. Michael Rynn 4 years ago

    This government has to fall soon, for even thinking of such a thing. Of course its an application, to CEFC, but the Government has been giving hints they might twist all commonsense to classify “Laundered Coal” as Clean Energy. Its a really big horrible blatent lie. The government needs to fall.

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