Powering North Queensland: renewables in coal country

Last week, the North Queensland city of Townsville hosted a gathering of Australian proponents and champions of renewable energy.

The Powering North Queensland Summit was well timed, occurring amidst a significant surge in Australian renewables investment with Queensland in particular experiencing huge interest in its world-class solar radiation levels.

Defying the policy uncertainty that has held back utility-scale solar in Australia whilst the rest of the world marches on, much of the new renewables investment is happening in what has always been known as coal country.

Collinsville is a Queensland town with strong ties to coal. Yet it is already host to two solar projects; Edify Energy’s 70MW Whitsunday Solar Farm and Ratch Australia’s 43MW Collinsville Solar Project. The latter is being built on the site of a disused coal-fired power station.

Glencore recently received mining licences for its Wandoan Coal Project in Queensland’s Surat Basin.

The accompanying press release was rather cautious on the project’s prospects stating that “Adding significant new tonnes to the market at this time could adversely impact the profitability of existing thermal coal production, potentially putting jobs at risk as the market adjusts downwards as a result of oversupply.”

It seems more likely that it will be solar power that will be providing jobs in the Wandoan area. Royal Dutch Shell is continuing its transition towards renewable energy with regional council approval of its 250MW Delga Solar Farm near Wandoan.

In addition, Equis Energy also has regional council approval for its Wandoan South Solar Project. With a capacity of 1GW, the project would be Australia’s largest and demonstrates the pace at which the Australian utility-scale solar industry is developing.

The current largest solar farm in Australia is the 102MW Nyngan plant in New South Wales, although it won’t hold the title for long given the current pace of solar development across the country.

In support of the Queensland government’s target of 50% renewable energy by 2030, Transmission company Powerlink is seeking expressions of interest for connections to its proposed North Queensland Clean Energy Hub.

The hub will consist of a transmission loop from Townsville to Cairns. Projects already set to be connected include Genex’s solar and pumped hydro project at Kidston and Windlab’s 1,200MW solar, wind and storage hybrid project amongst a host other wind, solar and hydro projects.

The 600 jobs that the Wandoan South project would provide during the construction phase is also highly significant given the rates of unemployment in parts of Queensland.

The Townsville summit heard that the unemployment rate in North Queensland is almost 10%. Happily, the summit attendees also learnt that there are 31 renewable projects in various stages of development across Queensland with the potential to create over 3,000 direct jobs during the construction phase.

The level of job creation driven by renewables in Queensland puts the 1,464 jobs expected to be created by Adani’s Carmichael coal project in perspective. This is especially true given that those jobs can only be created if Adani finds financiers willing to ignore the declining trends for thermal coal (a trend Glencore appears to be mindful of given its caution at Wandoan).

The Queensland public has been exposed to more of the usual fanfare surrounding Adani’s latest upbeat statement on the Carmichael proposal. The company’s announcement that work on the mine is to begin in October is designed to give the illusion of real progress. The reality is far less exciting for those seeking job creation in Queensland.

An Adani regional manager made it clear that Carmichael employment would peak at 49 people in 2017 with work limited to tasks such as soil testing and design work. Hardly a jobs bonanza.

Modern, automated coal mining doesn’t employ that many people anymore. In truth, beyond the construction phase, this is also true of the electricity generation industry whether you’re considering a solar plant or a modern coal-fired power station.

However, the Powering North Queensland Summit was reminded of another important implication of increased renewable energy generation – cheap electricity.

A small but vocal minority of people in Australia like to insist that the answer to Australia’s high electricity prices is to build modern coal-fired power stations. Such views represent a failure to do even the smallest amount of research on the subject, exposing the ideology behind them.

Federal Treasurer Scott Morrison recently acknowledged the myth of cheap new coal power, making it clear that modern, efficient coal plants are not the solution to reduced power bills.

However, that is exactly what renewables can do. With the technology getting ever cheaper, increased capacity will allow renewable power plants to consistently bid under fossil-fuel based power plants in the market and push them down the merit order.

Reduced power bills for consumers and businesses will be the result.

This will be the real jobs legacy of renewable energy; the low electricity prices that renewables drive will help businesses of all sizes to prosper, supporting and creating jobs in any economy where wind, solar and storage are commonplace.

Simon Nicholas is Energy Finance Analyst at IEEFA