There is increased speculation that the Coalition government is prepared to spend taxpayers money on a new clean/cleaner/cleanish/not-quite-so-dirty coal plant in an effort to get conservative support for a clean energy target and even to appease potential One Nation voters.
The construction of new coal fired generator – be it in the Latrobe valley or the preferred location of north Queensland – makes no economic sense whatsoever, despite the insistence by conservatives and the Murdoch media that it will “produce jobs” and lower energy prices.
But The Australian reported on Monday that prime minister Malcolm Turnbull and energy minister Josh Frydenberg are considering offering a government-funded coal plant as the ransom to pay to get a clean energy target approved by conservative factions led by former PM Tony Abbott and Craig Kelly.
The proposal, the paper says, will be put to the party room later this month, presuming it hasn’t already torn itself apart over the issue of same-sex marriage.
The energy industry has already ridiculed the idea of a new coal-fired generator, many times over, including the big three energy retailers, the main coal generation lobby, and most energy analysts.
Bloomberg New Energy Finance has said the economic case for new coal-fired generators existed only in an imaginary world, because their cost would be more than double that of renewables in a real one. Even the Productivity Commission has rubbished the idea of government support for a new coal generator.
But as we’ve written before, the right-wing of Australian politics has pretty much hijacked the energy debate in Australia. And it’s not just the right wing of the Coalition that concerns Turnbull and Frydenberg, but also the growing support for One Nation, particularly in Queensland.
One Nation, of course “chooses to believe” that climate change is a hoax and that renewable energy is no good, but the scary aspect for the Coalition, the state Labor government – and most others for that matter – is that One Nation is now attracting more than 20 per cent of the vote in Queensland.
The Newman government in Queensland found out, to its cost, the risk of endorsing One Nation, but it seems that the Coalition may be prepared to deliver some of their pet projects – such as a coal-fired power station in far north Queensland – even though the area is a hub of activity for new solar farms and some wind projects.
At stake is not just the Queensland poll,due in 2018, but also the next federal election, where Queensland seats could play a decisive role. As this poll shows, or purports to show, Queenslanders are convinced that renewable energy is the cause of their rising bills.
The push for a coal plant in north Queensland is considered bizarre, given the fact that the new solar plants will whittle away demand during the day, and the area’s biggest energy user – the Sun Metals zinc refinery – has itself turned to large-scale solar, because it’s cheaper, to underpin expansion plans.
But apparently their desperation is so deep that they think a coal-fired power station would supply a future aluminium smelter, a proposal promoted by the former resources minister Matt Canavan.
That idea seems idiotic, given that aluminium probably needs power less than $30-40/MWh to be competitive internationally, and this can only be delivered by very cheap large scale hydro (in Russia, Canada, or China), and because of the current supply glut which has afflicted Alcoa’s operation.
Perhaps the push to have a government-funded coal-fired power station is the conservative way of admitting that new coal cannot compete with wind and solar and storage, even with a Clean Energy Target configured to encourage black coal over brown coal.
The one remaining challenge may be to work out the smallest amount of money that could be spent to satisfy their need for a coal-fired generator.
Making them smaller, of course, loses the opportunity to gain economies of scale, but there seems to be no room for a new coal generator in far north Queensland anyway, not with some 4GW of wind and solar projects making their way to the starting line.
Maybe the Coalition could get away with a combustion stove. After all, treasurer Scott Morrison already has a lump of coal.