The Coalition government has unveiled its short-list of 12 new generation investment projects that could be eligible for taxpayer funds and government support, but despite prime minister Scott Morrison’s stated support for coal investments, there is no new coal project in that list.
The list revealed by Morrison suggests only one coal upgrade has made the cut – for the Vales Point coal-fired power plant that is co-owned by prominent Liberal Party donor and coal advocate Trevor St Baker. Another five are gas plants, while a further six are storage projects, all associated with wind and solar generation.
The shortlist was whittled down from 66 different proposals received by the government in their hastily arranged request of interest, which included 10 related to coal, others related to wind, solar and storage, and most including some sort of gas investment.
However, the government has bowed to pressure from Queensland-based LNP members, and from former deputy prime minister Barnaby Joyce, and agreed to a “feasibility study” for a new coal generator in Queensland.
These include a possible coal plant around Gladstone, or possibly a revival of the old Collinsville coal fired generator near Townsville, even though this is not likely to stack up for many reasons include costs, emissions, and the simple fact that one is not needed.
“There is no commitment to underwrite or support any of those projects,” Morrison said. “We want to do the proper analysis to work out which project or which group of projects actually delivers on the need.” (We save them the trouble with this analysis on how only lies and misleading information are behind the push for new coal in the area).
The shortlisted candidates will be invited to submit more detailed proposals, including pricing position, before any final decision is made on any underwriting agreement. Given that the government will likely soon be in caretaker mode – as early as late next week for a May 11 or May 18 poll – this will be a decision for a future government.
“What we’re talking about is fuel agnostic. Wherever it comes from, we just want what is going to provide for the reliability that is necessary,” Morrison told journalists on Tuesday.
“So these projects have been selected to undergo further examination and they’ll be able to present their case, these 12 projects, for us to form a position on using the underwriting mechanism that was recommended by the ACCC.”
The shortlisted projects include, unsurprisingly, UK billionaire Sanjeev Gupta’s proposal to build more than 1GW of solar and storage – both battery storage and pumped hydro – to help power the Whyalla steelworks and other large energy users in the region.
Gupta has said that government support would eliminate much of the financial risk and significantly bring down the cost of solar. His project comprises the Cultana solar plant, the Playford battery at Port Augusta and a pumped hydro project in an old iron ore mine in the Middleback Ranges,
The list also includes Rise Renewables’ pumped hydro project in South Australia, another pumped hydro project proposed by St Baker’s Delta Energy at Lincoln Gap, and a UPC pumped hydro project at Armidale in NSW, the Tasmania “battery of the nation” project, and another pumped hydro in Queensland at Crows Nest.
Interestingly, UPC is a company associated with Oliver Yates, the former head of the Clean Energy Finance Corporation who is running against former energy minister and current Treasurer and deputy Liberal leader Josh Frydenberg in the seat of Kooyong.
Rise Renewables, which proposes an associated solar project to go with the Baroota pumped hydro project, which is 200MW to 270MW and eight hours of storage, is headed by another former Macquare Group banker,s Brer Adams and Sam Cooper.
It’s not surprising that no new coal project made the shortlist, despite the bravado from the fossil fuel lobby and some MPs and the Murdoch media. Neither did a proposal to bring the highly polluting Redbank coal generator back into operation.
That really is significant because even though every major energy group has made clear, it wouldn’t make sense, it is only now that the Coalition has agreed with them.
It is clear, after all, that any such project would be relying on heavy government funding, but will also likely need some form of indemnity against carbon pricing to protect against the inevitable shift to zero emissions technology and the increasing pace of the energy transition.
There is no detail about St Baker’s proposed upgrade for Vales Point, which is the next coal generator in NSW due to close after Liddell in 2022. He bought the plant for $1 million a few years ago, has made hundreds of millions from the investment and is now looking to keep it going beyond the planned closure date by 2029.
Quite why it needs more government funding in light of the windfall gains it has already made is not entirely clear, but St Baker is an influential voice in the conservative sector, and a noisy if misled opponent of wind and solar.
In the end, polls suggest that it will be Labor making the choices after the upcoming election, which is expected on either May 11 or May 18. Given their commitment to a 50 per cent renewable energy target, and a 45 per cent emissions reduction cut, and the lower costs of wind, solar and storage, it is unlikely these coal and gas projects will see the light of day.
“Any ‘shortlist’ that includes coal is a shortcut to worse droughts and more bushfires,” said The Greens climate spokesman Adam Bandt said in a statement before the release.
“Spending taxpayer money on coal is like giving money from the health budget to a tobacco company. The government shouldn’t be upgrading coal, it should be shutting it down.
The Australia Institues climate expert Richie Merzian said the government had shown its “true climate action colours” with the selection of six fossil fuel projects in the shortlist.
“This program has no budget, no criteria, no transparency and according to our legal advice, no legal mandate to proceed without new legislation being passed.
“Without a legal mandate, the Underwriting New Generation Program has been found out as nothing more than a one-eyed Government offensive to cherry-pick and promote proposals to continue Australia’s reliance on fossil fuels.
“The only thing the Prime Minister Morrison’s feasibility study for central Queensland will reveal is the deep unpopularity of coal. Our research shows that across Australia, opposition to fossil fuel subsidies is strongest in Queensland (50 per cent against, 27 per cent for).
(This is a breaking story and will be updated with further details).