Energy industry gives Malcolm Turnbull’s clean coal power call the cold shoulder
AGL Energy, owner of Victoria’s Loy Yang A power station, has no plans to build new clean coal power plants.
AGL Energy, owner of Victoria’s Loy Yang A power station, has no plans to build new clean coal power plants. Paul Jones
Energy companies gave Malcolm Turnbull’s call for Australia to embrace new clean coal power plants the cold shoulder, and experts said the Prime Minister was “tilting at windmills”.
AGL Energy, which owns large coal fired power stations in Victoria and NSW, pointed to its Greenhouse Gas Policy, which says: “AGL will not build, finance or acquire new conventional coal-fired power stations in Australia (i.e. without carbon capture and storage).
AGL will not extend the operating life of any of its existing coal-fired power stations.”
“So, therefore, no, we won’t build any clean coal power stations,” a spokeswoman said in an email.
AGL owns the 2,200 megawatt Loy Yang A brown coal power station in Victoria and the 2600MW Bayswater and 2,000 MW Liddell black coal power stations in NSW.
Origin Energy, which owns the 2,880 MW Eraring black coal power station in NSW, said via a spokeswoman “Eraring is our only coal interest and we have previously flagged plans to close that by the early 2030s.”
Super-critical coal plant costs are on a par with wind power and much higher when carbon capture and storage is added
Super-critical coal plant costs are on a par with wind power and much higher when carbon capture and storage is added CO2CRC, AUSTRALIAN POWER GENERATION TECHNOLOGY REPORT 2016
Mark Collette, head of energy at Energy Australia, said, “While existing coal is cheaper than other forms of generation, investors and financiers view it as a legacy technology, one which will be replaced – the only question is when.”
He said renewables were only a partial solution and Energy Australia – which owns the 1480MW Yallourn brown coal plant in Victoria – had a “technology neutral” view of what should replace coal power.
Bruce Mountain, director of Carbon+Energy Markets, said the clean coal power stations are extremely costly to build, only make financial sense when operated for 30 years and come with huge carbon risk.
“There is zero prospect of this happening unless the government is willing to put its hand in its pocket,” Mr Mountain told The Australian Financial Review.
He said Australian estimates of a “levelised cost” (capital plus operating cost) of about $80/MWh for ultra-super critical coal plant – the latest technology being built – look low.
Hundreds of such plants are being built in Asia, but recent experience in South Africa, where construction costs are closer to those in Australia, put the cost at about $100/MWh, with capital costs of $21 billion-$24 billion for the huge 4300MW plants. Carbon capture and storage adds considerably to that cost.
They also come with long lead times – eight years from financial close to operation of the first 700MW unit.
Tony Wood, director of the Grattan Institute’s energy program, said the lead times should not be as great if new plant were built where existing coal plant is located but the cost of power from a clean coal plant was about the same as that from gas and clean coal power still emits substantially more carbon dioxide than gas plants.
Mr Wood said the industry was looking for bipartisan policy and “by bashing Labor it’s harder to get Labor to come on board”.
On Mr Turnbull’s call for Victoria and NSW to allow coal seam gas to be developed, Mr Wood said a nationally consistent coal seam gas policy would make sense but Canberra would have to offer Victoria’s Andrews government money to convince it to change its anti-gas policy.
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