Coal industry expresses ‘serious concern’ about Australia’s electricity market review

JOHANNESBURG (miningweekly.com) – The Australian coal industry has expressed “serious concern” about reports that the Finkel review of the national electricity market has turned its back on coal-fired electricity, in favour of renewable energy.

Minerals Council of Australia CEO Brendan Pearson said on Monday that the country could not afford to put all its “eggs in the solar, wind and gas basket”.

“An energy blueprint that strays away from coal generation, or deliberately excludes its contribution in the future, means higher prices and less reliable electricity for everyday Australians, industry and businesses.”

The Finkel review, which is due to be delivered to the Council of Australian Governments on Friday, will reportedly recommend a low-emissions target (LET), which will penalise coal without carbon-capture storage. Citing modelling done for the Climate Change Authority, The Australian reports that an LET means that coal will only comprise about 20% of the country’s electricity generation by 2030, and 1% by 2050.

Pearson said the MCA believed that modern, super-efficient coal plants should remain the mainstay of the country’s electricity system, while other energy technologies were pursued as complementing technologies.

“Technology leading countries including Japan and Germany understand this and anchor their electricity production with affordable, reliable and low emission coal generation as do the fast-growing economies of Asia with some 1 200 high-efficiency, low-emissions (HELE) units under construction or planned in the region. Australia also has access to the highest-quality coal in our own backyard and the rest of the world pays us a premium to use it.  Accordingly, it would seem an epic economic own goal not to use Australian coal for our own purposes.”

QUEENSLAND PLAN
Meanwhile, the Queensland government on Monday published its ‘Powering Queensland Plan’ ahead of the Finkel review, which the Queensland Resources Council (QRC) welcomed, although it expressed disappointment that the state had turned away from a technology neutral approach to electricity generation.

Premier Annastacia Palaszczuk has Queensland’s target to 50% renewable energy by 2030 and announced a reverse auction for up to 400 MW of renewable energy, including 100 MW of energy storage.

QRC CEO Ian Macfarlane said that the 50% renewable energy target was a “major concern” for Queensland resources chief, citing the recent QRC State of the Sector sentiment survey.

“If we are to be agnostic in terms of the sources of energy the government should also support the addition of a modern HELE power plant, potentially in Townsville, using some of the highest quality, low emission coal in the world right here in Queensland,” he said.

“The government is ignoring the global shift currently under way with coal-fired power generation in countries such as Japan, with new state of the art HELE plants delivering affordable, reliable energy with a significant reduction in carbon dioxide emissions.”

Macfarlane, however, praised Queensland for releasing another 395 km² of land for new gas tenure to supply the east coast market.

Palaszczuk said in a statement that the Powering Queensland Plan aimed to put downward pressure on electricity prices, grow jobs and transition the state to a low-carbon electricity sector.

The plan includes commissioning an Energy Security Taskforce, which will implement the Finkel review outcomes accepted by Queensland. The taskforce will be chaired by Finkel Review panel member and former Energex CEO Terry Effeney, and members include Queensland’s Chief Scientist, Professor Suzanne Miller, as well as Queensland Under Treasurer Jim Murphy and Queensland Energy and Water Supply director-general Professor Paul Simshauser.

Queensland will also invest $770-million to cover the cost of a Solar Bonus Scheme aimed at bringing price relief, Stanwell Corporation’s 385 MW Swanbank E gas-fired power station will be restarted and the organisation will be directed to undertake strategies to lower wholesale prices, while the restructure of the government-owned corporation’s generators and potential establishment of a ‘CleanCo’ will be investigated.

The state will further invest $386-million in its Powering North Queensland Plan to strengthen and diversify the north’s energy supply.

Energy Minister Mark Bailey said the first priority for the taskforce would be to work with Queensland’s energy businesses to ensure Queensland’s system remained secure during the high demand periods over the 2017/18 and 2018/19 summers.

“The taskforce will also lead work into developing transmission infrastructure in Queensland’s North-West to support a clean energy hub, assess the need for expanded interconnection between Queensland and other states, and investigate new hydro-electric generation sites,” he commented.