Five reasons not to build new coal power plant in Queensland | RenewEconomy

Five reasons not to build new coal power plant in Queensland

Climate Council report on Queensland renewables offers timely reminder that building a new coal plant in the state’s north is a terrible idea.


The reinstatement of Nationals Senator Matt Canavan to the position of federal minister for resources and northern Australia has put the campaign to build a new coal-fired power generator in north Queensland right back on top of his political agenda.

He wants to use the government’s $5 billion Northern Australia Infrastructure Facility to back the project.

“I want to get a coal-fired power station in north Queensland (and there’s no reason) why that cannot be done through the NAIF,” Canavan told The Courier-Mail within hours of being cleared by the High Court over concerns of dual Australian-Italian citizenship.

But, as timing would have it, a new report from the Climate Council on the state of renewables in the “Sunshine State” was published on Tuesday.

And it happens to offer up five very good reasons why building a new coal plant in northern Queensland would be a really bad idea – for the state, for the nation, and for the world. It is timely, given that the state poll will be dominated by this issue, and that of the Stop Adani campaign,

1.It is prohibitively expensive, and a terrible use of public money

It’s all very well to talk about cheap, baseload coal power, but is there actually such a thing? Not really, no. Not in Australia, anyway. And certainly not when it comes to building new, so-called, high efficiency low-emissions coal-fired power generation.

As the table below shows, the construction of new renewable power technologies – including the solar thermal plant being built in Port Augusta, South Australia, by SolarReserve – are now cost competitive or cheaper than new coal and gas power plants, by a significant margin.

According to the data collected by the Climate Council, building new coal with carbon capture and storage would currently cost $A352/MWh, according to the BNEF 2017 data, while new large-scale solar PV can be built for as little as $78/MWh, and new wind farms for between $60-$118/MWh.

In August this year, for example, AGL Energy secured an off-take price of below $60/MWh through the sale of its 453MW Coopers Gap Wind Farm in Queensland’s south-east.


2. It will take too long

As well as being more expensive, it takes a lot longer to build a new coal-fired power plant than it does to build large-scale solar and/or wind farms with battery storage. According to the below table, it will take upwards of six years to build a new coal or gas power station in Queensland, in which time a massive pipeline of large-scale renewable energy projects are expected to be built, while battery storage costs continue to decline.

This not only means a long wait for new coal-fired power generating capacity, but a much higher chance of new fossil fuel plant winding up as stranded assets by the time they are finished, because better, cheaper technology has taken its place.


3. It’s a good chance to wind up as a stranded asset…

…and not just because of the long build time, the high generation costs, and the increasingly unattractive attached carbon liability. But because it is highly likely that new coal capacity just won’t be needed, because heavy industry and other major energy users in Australia are turning to renewable energy, all by themselves.

Just ask UK steel billionaire Sanjeev Gupta, who just this week revealed his plans building 1 gigawatt (1,000MW) of dispatchable renewables – solar, wind, battery and pumped hydro storage, and demand management – in and around Whyalla, where his major steel plant is located.

Certainly private investors aren’t interested in new coal, but are piling into the Australian renewables market. For example, British investment manager Foresight Group this month continued its solar buying spree in Australia, announcing new deals to acquire shares in three Canadian Solar projects in Queensland, with a combined capacity of 117 MW.

And just last week, the Asia-Pacific region’s largest renewables developer Equis Energy – which in August announced plans to build a massive 1,000MW solar farm in the heart of Queensland’s coal and gas region in the Surat Basin – sold its $5 billion portfolio of projects to a consortium of high powered global investors in a deal that is being described as the largest ever purchase of renewable energy generation assets.

4. Queensland doesn’t need it, and the current Queensland government doesn’t want it

That’s right; as the Climate Council report notes, the Australian Energy Market Operator has assessed supply in Queensland over the coming decade (and remember, it will take at least six years to build a new coal plant) and found that the state had “no material risk” of insufficient electricity supply.

Rather, says the CC report, “Queensland will have more than sufficient electricity supply, given AEMO’s assessment did not include additional capacity provided under the state’s reverse auctions for 300MW of new renewable electricity and 100MW of energy storage.”

Added to that, the report notes that Queensland has the greatest number of large-scale renewable energy projects under construction in Australia, representing a quarter of all new capacity being built around the nation, $1.6 billion in investment and over 1,300 new renewable energy construction jobs. Check out the table below. And more are being announced every week.


And then there’s state’s rooftop solar capacity – and Queensland has that in spades. Across the state, an average of  31.6 per cent of households now have rooftop solar, and 14 Queensland postcodes boast more than 50 per cent of households with solar panels installed, including Elimbah, at 63 per cent.

Recently announced new government incentives look set to give those numbers a fresh boost, both for household solar and in behind the meter battery storage. And why wouldn’t people install solar if they could? According to the report, Queensland households with rooftop PV use 18 per cent less electricity from the grid than the average residential user.

5. It will blow the state’s carbon budget, and blow out Australia’s

As the Climate Council report puts it, “building a new coal fired power station in Queensland would effectively lock in over 40 years of pollution. This is well beyond 2050 when the Queensland Government and Australian Government have committed to net zero emissions in line with the Paris Climate Agreement.”

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  1. trackdaze 3 years ago

    Qld just needs to knock the head off the 5-7pm ducks head with battery/energy storage and intro daylight savings which, would be quite literal in sofar as it would time generation with some of the peak use. Add a sprinkle of demand management which it is doing with peaksmart pool pumps and air conditioning.

    Now it just needs to solve network costs.

    • Mike Westerman 3 years ago

      It could comfortably do that using Wivenhoe: 500MW for 10h. An attack on network costs could start by promoting EVs, and writing off some of the most egregious overbuilds.

      • technerdx6000 3 years ago

        What I don’t get is why isn’t Wivenhoe already being used? Is it because the 30 minute rule makes coal more profitable at the moment?

        • Mike Westerman 3 years ago

          Most likely because its owner is making too much money out of its coal power stations! But also it is reserve for those coal stations. It’s a pity that it isn’t carved out to form a separate and competing entity.

        • Andrew Roydhouse 3 years ago

          Wivenhoe’s capacity is a fraction of the Qld Govt owned Coal units capacity. Wivenhoe has to pump back the water afterwards and uses 1.5x the energy to pump it back as it produces.
          So they make much more per MWh produced by coal especially if the prices are high.

          • Mike Westerman 3 years ago

            It’s about 10% of what is online in coal, and could marginally influence peak prices but undercutting Gladstone. 1.5x is worst case – roundtrip efficiency is between 67 and 75% – lowest when run to its limits, highest when operated around best efficiency point. Look at today: there is $50-60 arbitrage for several hours where Wivenhoe could contribute but since they are all owned by the same shareholder and provide useful dividends, it doesn’t happen.

          • Andrew Roydhouse 3 years ago

            The 66% efficiency figure is what the Qld Govt’s report cited. The Snowy is only marginally better at 67%.

            Does anyone appreciate the hypocrisy of the Snowy scheme claiming to be ‘clean green energy’ when around 90% of its generation is due to pumped hydro not run of river/dam?

            Modern pumped hydro turbines are specifically designed for the bi-directional flow vs the separate pumping units used for the Snowy and Wivenhoe.

          • Mike Westerman 3 years ago

            I’m quoted from the original paper from 1986. 90% of Snowy’s energy is not pumped hydro – the 3 tandem units at Tumut do not pump often at all with most energy coming from snow melt runoff, particularly the large increase in energy from pumped from Eucumbene into the Murray side. I don’t understand why you would class that as hypocritical.

            You fail to understand the reason tandem machines were installed: they are no less “modern” than reversible machines and >10% of stations are still installing them because of their superior operating characteristics and efficiency.

          • Andrew Roydhouse 3 years ago

            In a presentation given by the Snowy people back when it was proposed to be privatised – I asked the question and they stated that in a typical year that 90+% of power produced was from pumped hydro.

            if you look at the widget on each page of RE – or go to the full sized page you will see that Snowy only produces at high price times other than run-of-river/dam when it has no choice.

            More recently when speaking with the Clean Energy Regulator – they directed me to where the surrender of the RECs is detailed. Guess who makes the top 15 surrenderers (aka offsetting their coal-fired power purchasing for pumping)? Yes, that’s right – Snowy does!

            Actually I was surprised they were not top ten, and said as much. To which the CER official replied – it was one of their best snow seasons in years so they nearly doubled their melt generation.

            So for each MWh they produce they need to buy half a REC to cover the 1.5MWh of predominantly brown coal-fired production they use. Seems they have a ‘deal’ with the Loy Yang stations.

      • trackdaze 3 years ago

        Duck head is about 1.2GW.

      • Alastair Leith 3 years ago

        Wivenhoe is owned by same company that owns a gas peaker, so they almost never use it, all fair game according to ACCC.

  2. Chris Fraser 3 years ago

    Very compelling and well said !

  3. Roger Franklin 3 years ago

    Oh Matt….. you are so predictable.

  4. Ken Dyer 3 years ago

    Thanks for this excellent report. We need these stats to blow all the coal lovers out of the water in Queensland, I mean the LNP and One Nation

  5. Joe 3 years ago

    Sophie, a great analysis thank you. So if this information is out there how is it possible for Matt Canavan / The COALition to keep up the facade that a new Coaler is a viable proposition. Canavan & co need to interrogated and called out on who it is that provides them with advice that a new Coaler is a goer. Something smells here….rotting lumps of coal perhaps.

  6. Stephen Simpson 3 years ago

    Great article Sophie, but as Joe stated how do we get it to the mainstream media, 60 minutes did a piece last week but I wanted to see powerful reasons for RE and was a bit disappointed.We need a huge effort to stop Canavan.

    • DJR96 3 years ago

      I just shared it on his FB page. 😉

  7. Hendo 3 years ago

    Whatever Josh says and does, the next Queensland state government, if it is LNP, plans to build a coal fired power station in north Queensland. So stupid.

    They also support Adani, claiming it will generate jobs in the coal belt Gladstone – Townsville. The original “bait” number was 10,000 jobs, but in 2015, the Adani Corp, under oath in the Queensland Land Court, revised that number to just 1,460. At that time the (bait again) number was 60 million tonnes of coal per year for 60 years. The yearly output has been revised down to 25 million tonnes per year. That will probably reduce the number of jobs, and if you apply for a job with them, you will see that they are only looking for experienced workers. The trucks, loaders and even the trains are driver-less, all automated and remotely controlled.

    If that is not enough, the coal is poor quality, low thermal energy and high ash.

  8. john 3 years ago

    I noticed the type of misinformation being put into regional media.
    Under a heading of LCOE $/MWh with 2015 as the date.
    The following figures from some outfit called CO2CRC.
    brown coal $75, black coal $60- $95, black coal super critical with CCS $150-$195,
    solar pv residental $130-$199, Large scale PV $125-$160 and wind $80-$130

    Every article I have read and every price taken by for instance wind and solar are below these figures.
    There has been a push for a coal fired generator for some time now and the type of advertising as in the figures above are published to spread disinformation and i bet this works.

  9. Radbug 3 years ago

    Tim Nichols signed off on the Bombardier train fiasco, and now, despite his efforts to convince the Queensland electorate that he has turned over a new leaf, insists on embarking upon a new financial white elephant in the North Queensland coal-fired power plant. Leopards don’t change their spots and neither does Tim Nichols. Lesson: if you live in Queensland and you want to lose a lot of money real fast, vote LNP on November 25!

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