Frydenberg says NEG is “best chance” for coal generation

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Frydenberg says NEG offers “best chance” for coal, says rapid decarbonisation would cause “lights to go out”, and resumes attack on AGL and Labor’s renewables target.

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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
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Australian Energy Minister Josh Frydenberg delivers his address to the National Press Club in Canberra, Wednesday, April 11, 2018. (AAP Image/Lukas Coch)

Federal energy minister Josh Frydenberg has again come to the defense of coal power in Australia, in a bid to calm Coalition waters that were ruffled by the “experts” assessment last week that new coal had no future under the National Energy Guarantee.

Speaking at the Australian Energy Week conference in Melbourne on Friday, Frydenberg said coal had its “best chance” under the Turnbull government’s proposed NEG, and would continue “keeping the lights on ” in Australia for decades yet.

“There has been some media speculation about what is the future for coal… I believe that under the NEG, which puts a premium on reliability, coal will have its best chance to continue as an important source of energy generation in the market,” Frydenberg told the conference.

“People who think we can decarbonise the Australian economy overnight, don’t understand the reality of situation if we do so, we would actually see the lights go out on the east coast of Australia.

“Coal continues to be a critical part of our energy mix. We have (existing) coal-fired power stations in Australia with an average life of 27 years, and certainly under the NEG there will be more of an incentive to invest in those existing power stations.”

The comments come more than a week after the chair of the Energy Security Board, Kerry Schott, told a separate Melbourne conference that there was “no way” anyone would fund new coal power under the NEG.

“I can assure you that, unless there’s a change of technology, there would be absolutely no way that anybody would be financing a new coal-fired generation plant,” Schott said.

Those comments, originally reported by RE, were soon picked up by the mainstream media, drawing responses of shock and outrage – and calls to “please explain” – from the Coalition’s right wing, including resources minister Matt Canavan and chief rabble rouser, Tony Abbott.

The Frydenberg comments came as the Coalition continued to attack Labor’s 50 per cent renewable energy target for 2030, which comes with a 45 per cent emissions reduction target that the Climate Authority said was the bare minimum to meet the Paris climate goals.

That attack was kicked off again in Scott Morrisson’s budget, which promised $80 billion in tax cuts for companies, $140 billion in tax cuts – mostly for high earners – and $15 billion in tax cuts for average wage earners, and a scrapping of assistance for energy bills for low income households.

Frydenberg waded in before his speech with this tweet above.

He was joined by finance minister Mathias Cormann, whose claims were met with a swift and concise rebuff from Victoria energy minister Lily D’Ambrosio. The Coalition has no modelling that justifies that claim.

Frydenberg, who last week kept his responses to the Schott comments quite measured and neutral, has seemingly succumbed to party pressure this week, reverting to comments about lights going out, and the importance of keeping “reliable” coal power in the system.

Of course, as we have seen illustrated over the past summer, Australia’s ageing coal power stations are anything but reliable, with entire generating units dropping out without notice on a fairly regular basis.

But Frydenberg also used his speech on Friday to underline the federal government’s desire to keep the nation’s ageing coal fleet open past its use-by date, and in particular, AGL Energy’s NSW Liddell, which is due to close in 2022.

“We expect… the board of AGL, for the senior management to seriously consider what is on offer from Alinta,” he told the conference, in reference to the recent bid Alinta had made to buy out Liddell.

“We have an AEMO report that talks about 850MW of dispatchable power (going out of the market) should Liddell close, and insufficient new investment coming into the market,” he said.

“Even with (AGL’s) plan (to replace Liddell with mix of renewables, storage and gas) you’re not getting the same volume of power into the marketplace.

“You’ve got a battery that runs for 30 minutes, or you get a gas peaker that runs for 30 days a year, you’re not getting any reliable power,” he said.

The comments – the cheap and uniformed shot at the SA big battery aside – don’t gel with the minister’s earlier statement in his speech, than noted that the key issue for the future NEM was not to supply more baseload power, but to cater to a more peaky demand profile; something that batteries can do very well.

Nor do they reflect the actual findings of AEMO, regarding the retirement of Liddell, which were that AGL’s plans to replace it were “more than enough to meet the potential shortfall created by the closure.”

Frydenberg’s assertion to the contrary on Friday echo the talking points the Coalition chose to focus on at the time – that is, what might happen if AGL, and other market participants, chose to do absolutely nothing.

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52 Comments
  1. Paul Surguy 5 months ago

    Someone needs to put the lights on in Canberra first so, so Joshie can see the light

  2. PLDD 5 months ago

    I don’t think he is contradicting Schott. He was really just saying existing coal stations will run until their planned shutdowns. Schott is saying no new ones. The bit about Liddell is also meaningless – yes the board will consider the offer, they have never said they won’t

    So all in all political hot air probably aimed at protecting his back from Abbott & Co but not being daft enough to say something that is totally wrong or false (they don’t need anymore LNP MP’s to perform that task). He knows the financial reality and how the investment market views new coal and fully understands there wan’t a few billion in the budget for any new coal power.

    • John Saint-Smith 5 months ago

      I will believe what you say when I hear it from his lips. We all know he is at the beck and call of the More-ash For-us, and that’s why we have to put up with this ridiculous NEG. If you look a little closer, it’s not about Liddell so much as the rest of the old dinosaur burners that will be kept alive long after they should have been dead and buried. That’s all that the rabid coal eaters will accept, and if we keep excusing Frydenberg and Turnbull for their cowardice in the face of this reactionary attack, we will have this LNP government for the next 20 years.

      It’s time to call them out.

      • PLDD 4 months ago

        Agree with much you say. But I think if you listen to what Josh says, and all his contradictions, it gives some insight into the factional war in the LNP. He often sounds like a member of the only coal brigade but I think that is political lip service because he often then contradicts their stance.

        A good opportunity to exploit the ideological split.

  3. DJR96 5 months ago

    It seems too many people (in Canberra at least) don’t understand the difference between existing coal fleet and building a new plant. Entirely different, like the coal market itself, domestic consumption (10%) vs. export market (90%).

    They all must get used to the idea that there is no rationale for building any new coal-fired generators in Australia ever again. And that doesn’t mean fast-tracking the shutdown of the existing fleet. We all know they will be needed for decades to come (I’d say until around 2045), and that they will all retire through natural attrition over time anyway.

    So it’s a waste of time and effort worrying about coal. Just focus on building renewables to DISPLACE coal. The market will squeeze them out eventually.

    • Gary Rowbottom 4 months ago

      That is right, building new coal is a different thing to keeping the existing ones going – we do need to do that, until we are sure we don’t need them. FOr heaven’s sake, can the governments agree on the blindingly obvious science based imperative of where we need to get to, and focus some of the political energy wasted on trying to bash each other to death with adversarial tactics on to making the transition with as little human casualty as possible.

    • Alexander Hromas 4 months ago

      The problem is that many in the Lib/Nat coalition and some in Labor see our coal reserves as money in the ground and any that is not extracted and used as revenue forgone we urgently need to change this mindset a left over from the Fraser era that saw the Lib/Nat economic philosophy as “we cannot compete with the low labor rates in Asia and our best option is to dig up bits of Australia and sell it to them at a profit so we can import all those clever widgets that they will make from our minerals and coal

      • DJR96 4 months ago

        Such a resource is only of value if there is a market for it.
        In Australia we simply don’t have the electricity demand to use any more than we currently do, and that is declining as it becomes displaced by other sources.
        Internationally, sure, if there is a viable market for it make the most of it. But you can’t force a customer to use it if they don’t want to.

    • George Darroch 4 months ago

      We should absolutely fast-track the closure of the coal fleet. There’s no reason any coal plant (or mine for that matter) should be open past 1 Jan 2030.

      • DJR96 4 months ago

        And as I said, that only happens when they’re DISPLACED out of the market. For so long as there is a market that needs the power coming from them, they MUST remain operating whether we like it or not.

        Build enough renewables to supply the market with enough cheaper power then that leaves nothing for the coal-fired fleet to supply and they fold.

        I don’t care how quickly that occurs, the quicker the better, the point is that that is the only way to make them close.
        Screaming and protesting directly against coal won’t achieve anything.

        • Hettie 4 months ago

          That’s a sound argument, except that the big coal and gas generators are retailers too.
          They will buy only as much renewable power as targets require. Even though they pay less for it , and charge more for it, their main game is coal and gas.
          Most of them appear too stupid to realise that coal is moribund. They could gradually mI’ve their cape to wind and solar, so that as he coalers get less reliable, they are closed, but no. They are coal men, not energy people, and they will go to the wall defending the indefensible.

          • DJR96 4 months ago

            Good thing there is quite a number of non-generating retailers to choose from then isn’t it? They’ll source whatever is cheapest. Most of us are free to switch to and support these retailers. I already have, to Energy Locals.

            And what you have described is pretty much exactly what AGL is planning to do, especially with regards to Liddell. It’s not so much whether they are coal people or not, they are commercial enterprises and will follow the dollar. That is what drives them.

          • Hettie 4 months ago

            Agreed on both points.
            If mine ownership is also in the mix, the urge to stick with coal would be greater.
            No info on who is so vertically integrated –
            Miner/generator/retailer. Anyone?

  4. Chris Ford 5 months ago

    “We have (existing) coal-fired power stations in Australia with an average life of 27 years, and certainly under the NEG there will be more of an incentive to invest in those existing power stations.” Why on earth is an incentive to invest in EXISTING power stations close to (or past) their use-by date needed? Surely a competent government’s priority would be to provide an incentive to invest in NEW generation, the lack of which over the past 5 years is a huge part of the problem? But noooo, because it’s obvious that that would mean more renewables.

    • Hettie 5 months ago

      In what possible universe could the current Gov’t be described as competent?

      • Chris Ford 5 months ago

        Exactly. 🙂

  5. DevMac 5 months ago

    “There has been some media speculation about what is the future for coal… I believe that under the NEG, which puts a premium on reliability, coal will have its best chance to continue as an important source of energy generation in the market,”

    When talk comes around to renewables they start saying things like “Technology Agnostic”, but when it comes to Coal all that goes out the window.

    Hypocrites.

    • Andrew Roydhouse 5 months ago

      Perhaps he IS telling the truth.

      Only he left out exactly what that chance is…

      3% optimistically…..

      • Ren Stimpy 4 months ago

        if it’s left entirely to the market the chance is zero.

  6. Joe 5 months ago

    Joshie with his $300.00 scare campaign is just pulling numbers out of his arse. We saw this type of stuff with Abbott’s scare campaign against Labor’s ETS back in 2013. We all remember the $100.00 Roast song and dance. Joshie is reverting to COALition Plan A, when you have no policy of your own then just make up lies against your opposition’s policy and plan.

  7. Hettie 5 months ago

    Chins up, chickens, as my mum used to say when my sister and I were sad.
    They’ll be gone soon, and then the policies will be founded on evidence.
    The standing ovation that Shorten received last night for his climate change and energy statements shows the strength of feeling in the electorate.
    The Coalition can’t hold back the tide, but unfortunately they don’t have a King Canute to prove that to them.
    Australia will be a bit late to the party, but we will get there.

  8. Nick 5 months ago

    Wow. Just wow. This man is a criminal and should be treated as such. Any politician actively oppposing renewable energy is indirectly killing hundreds if not thousands of future generation humans due to air quality and climate related issues. Lock them up and throw away the key. I am sick and tired of it.

    • Hettie 4 months ago

      The Americans call it “Reckless endangerment.”

  9. John Saint-Smith 5 months ago

    Australia’s troubled energy grid is in good hands now.We’ll keep the coal lights on in the boiler room of the Lying Nasty Party, that’s for certain. It clear from the above, and several other embarrassing gaffs that Joshie doesn’t know what he’s doing. He doesn’t understand the difference between despatchable and baseload; he totally blew it when he criticised the Tesla battery for being too small, and then praised other smaller batteries for their FCAS capacities, and now Malcolm’s boy is talking up the Liddell power station as if it is the only reliable source of cheap, clean reliable electricity.

    Its not cheap when you will have to spend $1.5 billion propping it up for another 5 years. If Alinta buy it, no doubt they will be given the equivalent of $1.5 billion of taxpayer’s money to make the deal even break even. Remember AGL only accepted this dinosaur as part of a sweetheart deal on coal and the Bayswater power station. It wasn’t worth $1.5 billion to them.

    Of course it’s not clean, and we will all get the health care and climate change bills for that stupid decision.

    Anyone who think that the remains of the Liddell power station are a reliable source of power is drunk, or dumb, or both. Half of it is shut down already, and the two remaining 50 year old generators are likely to drop out at any time.

    The whole dumb project will come to an inevitable and very costly end about 2030, or maybe earlier. Then we will be up for another $1- 2 billion to replace it with renewables or, heaven forbid, about $4 billion for a brand spanking new HELE coal polluter, or 6-8 billion for a real clean coal generator and CO2 sequestration system.

    $1.5 billion could be spent on renewables and storage now, which would be ready by 2022, and would last for at least another 20 years after that. I can’t believe that we are having this conversation.

    • Hettie 4 months ago

      Yes. Feel better now?
      The obstructers will be run over by the renewables juggernaut that’s coming down the road at them. It’s just over that rise.

      • brickbob 4 months ago

        Yep,time and tide and renewable energy wait for no man] or woman] and Jush Friedmybrain is a liar!

      • Colin Edwards 4 months ago

        With Josh at the wheel of the coal-fired steam driven behemoth. His LNP passengers are due for a nasty surprise, just over that rise

    • solarguy 4 months ago

      Re: Your last sentence….. I can’t believe it either, there is something very wrong with some humans, it seems there are too many spontaneous lobotomies caused by greed effecting a certain gene pool of our species.

      Let’s hope there is some intelligent life some where out in the universe because there is SFA here on earth.

      • Hettie 4 months ago

        Hey! That’s harsh. Or do you think that we on these pages (well, most of us) are the only ones?

        • solarguy 4 months ago

          There are many, many that don’t read these pages and they are with us. It seems those in the current positions of power ( the RWRNJ) are either stupid or have been seduced by money or both. They are quite prepared to keep polluting this planet as if we have somewhere else to go to.

          There are also to many people out there that think climate change is a hoax, believe the COALalition BS and RE doesn’t work.

          Hell I’ve had a gut full of the fools, haven’t you.

          • Hettie 4 months ago

            Absolutely. At least most of the time this is an enclave of sanity.
            And an opportunity to vent some spleen either at or about the idiots.
            Sitting here in the half dark, wondering how long my autumn leaves are going to last.
            Silver birches and crabapple going gold, pistachios like glowing coals, grapes crimson, and a crepe myrtle quite scarlet. The first camellias are flowering too.
            Hard to believe it’s not quite 6 years since I started planting, and now the major task is pruning.
            Output today 17.2. Overcast most of the afternoon.

          • solarguy 4 months ago

            What a lovely picture you have painted, I can see it, it melds with my memory of England and my fathers side of the family. About 2hrs ago I was watching the Superb Wrens in the back yard, beautiful little things, makes my life feel richer.
            I love crepe myrtle’s and pistachios, you have got me weak with hunger now.

            We only managed 14.6kwh today and managed to fill battery, so all is good.

          • Hettie 4 months ago

            I’ll take a couple of pics in the morning and upload them.
            All in the spirit of sustainable housing and the trees one can have and not shade the panels.

    • DJR96 4 months ago

      The only “value” at Liddell is the transmission connection point. Where a huge renewables project can easily connect to. Which is why AGL won’t sell it. It is a big part of their future plans.

  10. Jo 5 months ago

    the minister for coal

  11. Thucydides 4 months ago

    Alinta to take over Liddell? The same company that walked away from its Port Augusta coal power clunker because it was too expensive – leaving piles of toxic fly ash to blow all over the residents. Watch out Muswellbrook!
    http://www.abc.net.au/news/2018-04-16/port-augusta-power-station-clean-up/9653688

    • Hettie 4 months ago

      Alinta have made an offer, is all. AGL have agreed to consider it.
      I suspect they don’t like the Gov’t pressure, and are unlikely to cooperate. They have plans for the Liddell site, after all.

  12. Grpfast 4 months ago

    Still continues that senior ministers of LNP refer to Australia when they mean NSW as the only state reliant on coal fired power stations.

    • Hettie 4 months ago

      Um, Queensland?

  13. Ian 4 months ago

    Oh, so that’s what the NEG was for: to save coal

    • RobertO 4 months ago

      Hi Ian, Remember that the NEG is the only plan, there is no alternative to the plan, there is no planning on ways to lower prices (accept by accidently allowing some RE into the system). The NEG is also aimed at supporting Coal by costing RE farms to have contracts for security of supply and making Retailers responsible for emissions (no more that 20% to 28% reductions).
      Oh and by the way coal is super reliable (Australian Coal Power is about 53 % + or – a few %).
      Where is our B Plan if Climate Change is real (Too many of our pollies think it’s not real, or B Planet, are we moving to Mars, a little small?)

  14. Farmer Dave 4 months ago

    The Minister talks about “people who think we can decarbonise the Australian economy overnight” in this statement, and I remember his saying something similar before. This is a classic straw man argument straight from the denier’s playbook. I have never met a person who thinks that, and I am sure no regular reader of this excellent site would think that, as they are too well informed for such nonsense. Frydenberg may as well be talking about there being fairies at the bottom of the garden, because they are as real as the legions of overnight decarbonisers.

    By using this dishonest tactic, Frydenberg is distracting us from the urgent task of decarbonising – getting off fossil fuels – as quickly as possible. He is trying to argue, in effect, that since we can’t do it overnight, then there is no point even making a start. I hardly need to point out that the sooner we start and the faster we move to get off fossil fuels, the smaller the climate disruption we can expect. The situation is urgent, and while urgent action is necessary, that is quite different from a mythical overnight transformation.

    Why aren’t the media calling him out for this schoolboy debating trick?

    • Hettie 4 months ago

      Becausent Rupert owns both the media, and the Gov’t. The climate denial is at Rupert’s bidding.
      Simple

      • Farmer Dave 4 months ago

        Fortunately, Rupert does not own all the media; I manage to read and watch a fair bit of media, even though I have been boycotting Rupert’s output for many years. I still think we should call out journalists who let people like Frydenberg get away with rubbish.

        • Ren Stimpy 4 months ago

          Rupert doesn’t own the ABC yet. Although maybe by proxy thanks to this current government.

          • Hettie 4 months ago

            True, but they have had so much fun funding stripped – about $250 mio since 2014, they are singing the Gov’t song to stay alive. That includes keeping a low profile on climate change and everything associated with it.

          • Ren Stimpy 4 months ago

            The axis of rotation in the media Gyroscope will always be the people’s ABC.

            Old Murdoch, Bolt, Hanson, and similar ambitious-yet-unskilled “Show Business People” are still kidding themselves that they can control public opinion via their pay-per-opinion model of crud.

  15. RobertO 4 months ago

    Hi All, The media still has sway in Australia. They believe that we greenies want to remove coal overnight. I kept hearing from (telling me) the bunch of CC deniers that I work with that if it’s in Print, if it’s on the Radio, if it’s on the TV it must be gospel truth. Three of them told me that we are stopping recycling because it was on the News. Our Recycling is about $15.00 to same volume of General waste is $25. They have no brains sometimes.
    Overnight to me is 10 years for maybe 80 % of Electrical and about another 10 for Transport (it very hard to say just how fast we could go if we had the right conditions).

    • Hettie 4 months ago

      Robert, no doubt in 1903 someone in authority was saying that having a man with a red flag walk in front of every motor car was the best hope for the horsedrawn vehicle industry.
      Perhaps it was the best hope, but it was nowhere near good enough.
      In ten years, motor vehicles had taken over.
      As far as EVs go, if one accepts that the usual lifespan of ICE vehicles is about 10 years, and that apart from Australia, world conditions are now such that EV growth is about to go exponential, by the time 90%
      of new vehicles are EV, around 10 to 12 years, ICE vehicles will have been replaced.
      I can’t see carmakers producing ICE cars just for Australia, so Aus will have a choice between accepting the change or going back to horse and buggy.
      So your 20 year timeline looks a bit long.
      Exciting or what?

      • RobertO 4 months ago

        Hi Hettie, I am so bright? Yes EV! What I ment to say was EV will start in ernerst in 3-5 years and take 10 to 12 years to complete and this will run concurrently with Electricity. In both cases we will not have 100% as Gas will be used as support of RE for when the sun do’nt shine and the Wind do’nt blow for longer periods that all our storage can match, and some Farmers may hold onto Tractors longer that most would consider normal (I drive a Tractor that about 30 years old and only occasionaly, my Mother used to have aTractor that was 50 years old and it still did its job,no air conditioning and no electrics other than the basics, with 50,000 hr on a jamed hr meter).

        • Hettie 4 months ago

          Ah, the good old Fergy tractor! Couldn’t kill them with a steam roller.
          I read your time line as being sequential, not concurrent.
          And yes, the last few percent of change will take much longer. It was ever thus.
          You could well be right about residual gas gen, but lots of small scale PHES may make even that obsolete.
          I do hope so.

  16. Gregory J. OLSEN Esq 4 months ago

    Josh Frydenberg is an incompetent Energy Minister! 🙁

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