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Federal Treasurer pulls plug on costly, slow LNP coal power station option

The Turnbull Government has pulled the plug on a proposal for a coal-fired power station in north Queensland as an expensive and inefficient option for additional electricity generation.

Federal Treasurer Scott Morrison told The Australian Financial Review:

“But let’s be real about it. These new HELE plants would produce energy at an estimated two and a half times the costs of our existing coal-fired power stations.  They would also take up to around seven years to set up.”

Queensland Treasurer and Acting Energy Minister Curtis Pitt acknowledged Mr Morrison’s honesty and said he agrees that the LNP’s coal-fired power station, which has no proponent and no site, would increase electricity prices and provide no short-term solution to Federal Government failures in the National Electricity Market.

“The LNP and Tim Nicholls don’t care about electricity prices paid by Queenslanders. That’s why power bills increased by 43% under the LNP’s time in office, compared to an average of 1.9% per year under Labor,” Mr Pitt said.

“It just does not make economic sense to spend up to $3 billion of taxpayer money to subsidise this expensive form of energy that industry players such as AGL consider to be unbankable – when there are cheaper and cleaner alternatives that can be delivered in a shorter period of time.

“The last time the LNP were in office they wanted a fire sale of our coal-fired power stations, they mothballed the Swanbank E gas-fired power station and they refused to develop large-scale solar projects.”

In stark contrast, the Palaszczuk Government is leading the nation on energy policy with a comprehensive $1.16 billion Powering Queensland Plan that retains electricity assets in public ownership, promotes Queensland’s sustainable energy mix including coal, gas and renewables, and provides power bill concessions to vulnerable Queenslanders.

The Powering Queensland Plan has helped stabilise electricity prices, delivers jobs and investment and lead the transition to a clean energy future.

Key elements of the Powering Queensland Plan include:

  • providing electricity price relief by investing $770m to lower the cost of the Solar Bonus Scheme, which halved the price increase on power bills
  • restarting Stanwell Corporation’s 385 megawatt (MW) Swanbank E gas-fired power station;
  • directing Stanwell Corporation to undertake strategies to place downward pressure on wholesale prices
  • investigating the restructure of the Government owned Corporation generators and potential establishment of ‘CleanCo’ (Clean Energy Corporation)
  • delivering a $386m Powering North Queensland Plan to strengthen and diversify the north’s energy supply
  • establishing Queensland Energy Security Taskforce which will implement outcomes of the Finkel Review – which are accepted by Queensland but not by the LNP and the Turnbull Government. The taskforce will also look at other actions to lead the nation on energy policy
  • confirming the Government’s commitment to a 50 per cent renewable energy target
  • undertaking a reverse auction for up to 400MW of renewable energy, including 100MW of energy storage
  • improving large-scale project facilitation, planning and network connections
  • implementing the Queensland Gas Action Plan
  • continue to advocate for stable, integrated national climate and energy policies.

Mr Pitt said action under the Powering Queensland Plan (PQP) – had been applauded by Mr Rod Simms, chair of the Australian Competition and Consumer Commission who said: “… the good news is, the Queensland Government, alone of any government, has drawn on its own budget to remove that cost to consumers and I certainly applaud them for doing that and again I think it’s evidence of a welcome focus on affordability…” (ABC Brisbane 25/7/17)

Mr Pitt said, “it’s great to see Mr Simms supporting our Government’s clear action on electricity pricing and I will be writing to him to provide further details about our intention to establish a new generation company focused on clean energy that may also have the added benefit of introducing more competition into the market.”

Mr Morrison’s comments follow a statement from Chief Scientist Dr Alan Finkel AO, head of the Independent Review into the Future Security of the National Electricity Market, that: “The actual cost of bringing on new coal in this country per megawatt hour is projected to be substantially more expensive than the cost of bringing on wind or solar.”

Former Federal Minister for Resources and Northern Australia Matt Canavan last week said that “a coal-fired power plant would cost somewhere between $2 and $3 billion.” (Q&A 17/07/17).

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