Already on the nose, could Prime Minister Scott Morrison and Energy Minister Angus Taylor do anything possibly more unpopular than announce funding for new expensive, unreliable and high-polluting coal-fired power plants during a record-breaking heatwave?
It turns out that yes, they could. Not just by funding coal projects, but the coal projects of no less than a major LNP donor, backed by mysterious Chinese investment partners, and attempting to lock in these deals ideally before the election, with little due diligence or transparency.
It has been widely reported that Trevor St Baker is seeking government support for $6 billion in new supercritical coal power plants.
Let’s take a look at the top eight reasons why funding these new coal power plants stinks worse than a river full of dead fish.
Coal power is spectacularly unpopular
Governments seeking re-election are supposed to do things that are popular. Coal is increasingly unpopular.
The Australia Institute’s 2018 Climate of the Nation Report, found that solar power is the most preferred energy source (and has been for the last three years), while at the bottom of the list, only 5% ranked coal power as their preferred choice (down from 18% in 2017).
- It’s bloody expensive
Almost every coal power station in this country was built with taxpayer support and the Prime Minister seems committed to continue that trend.
By contrast, the growth in renewable power generation in 2018 is the highest to date. According to the GenCost 2018 joint study by CSIRO and AEMO, even with up to 6 hours of back-up storage, new renewable generation is still more competitive than new coal power.
- You can’t count on coal
Australia already has four supercritical or so-called ‘High Efficiency, Low Emissions’ black coal power plants and Australia Institute analysis has found these ‘HELE’ plants break down more often per gigawatt than antiquated, subcritical black coal power stations.
- Coal is high-polluting
So-called “HELE” coal plants burning brown coal (like what Trevor St Baker is proposing in Victoria) would be no more efficient or lower emissions than some of Australia’s oldest subcritical black coal plants – whether or not they are ‘ultra-supercritical’.
Even ultra-supercritical plants burning black coal (i.e., the most efficient existing coal technology burning the allegedly ‘cleaner’ variety of coal – like what might be proposed for NSW by Trevor St Baker) are far closer in efficiency and emissions to other coal plants than they are to natural gas, which is itself a polluting fossil fuel.
And it’s not just greenhouse gas emissions that are of concern but St Baker’s broader track record dealing with dangerous materials. His aging and controversial Vales Point power station has sparked EPA investigations due to allegations of asbestos dumping on the company’s massive coal ash dam and of under-reporting toxic pollution.
This whole process has been questionable
The government’s Underwriting New Generation Investment program, announced only a few months ago, is being rushed and taking offers without even finalising the design. The PM wants it done with the cost to taxpayers or the environment remaining to be seen.
Morrison has also ignored the advice of the ACCC and will instead allow the very same energy companies he is threatening with a ‘big-stick’ to vie for funding (seems like the only thing at the end of the big stick is a big carrot), underwrite support from year one, and discard the need to have signed-up customers.
The Government has no mandate
It is still unclear how the government even has the mandate to proceed. Many of the underwriting modalities would require legislation, which would make it almost impossible to proceed before the election.
While the government will soon release formal program guidelines, it is unlikely to include any details on the mandate from which it can even proceed with the program.
Such a massive program could also leave taxpayers exposed to liabilities “with a net present value of billions of dollars” according to the Australian Industry Group, because Minister Taylor wants to indemnify projects against the costs of new climate change policies.
- There are questions surrounding the proponent
Trevor St Baker has a decades-long history in Australia’s coal power sector and with the Coalition. St Baker bought Vales Point coal power plant from the Coalition NSW government for just $1 million in 2015 and two years later it was revalued by the owners at $731 million.
Over the last few years, St Baker and his companies have been putting their hand up for every near-dead coal plant around the country. Now it looks like St Baker is looking for a new coal deal with the support of the federal Coalition government.
Adding to this information, St Baker’s ERM Power has donated at least $197,640 to political parties over the last decade, with the Coalition being the main beneficiaries.
- Who are these Chinese backers?
A controversial fossil fuel project, backed by the Federal government and to be paid for by mysterious Chinese investors? Why does this sound familiar?
At the end of 2017 it was reported that Adani would be thrown a financial lifeline by Chinese state-backed organisations.
Alas, Chinese investors soon realised that backing Adani would have significant cost. Aside from financial and economic non-viability, Chinese investors realised that this meant taking a side in a key Australian domestic political issue.
With little detail available, who’s to say this time round would be any different?
And given the media hysteria regarding Huawei’s investment in Australia, it is hard to see Scott Morrison encouraging Chinese investment in critical energy security.
For a Prime Minister battling to win an election, he should know better than to kick a massive own-coal.
Richie Merzian is Director of The Australia Institute’s Climate & Energy Program @RichieMerzian