Our love affair with coal: hotter than ever

Australia is set for a renaissance in coal-fired power, with up to 12 new coal-fired power stations planned across the country. According to information collated by Greenpeace, new coal-fired plants are under construction, planned or proposed in all states except Tasmania.

The plants include the Mt Piper and Bayswater 2GW plants in NSW, for which “concept approval” was announced this week by the NSW Government. The proponents of those projects, Delta Energy and Macquarie Generation, claim both plants will either be coal or gas-fired.  However, both are located next to existing coal-fired plants and need extensive gas infrastructure to either increase local supplies of gas or, in the case of Bayswater in the Hunter, connect to a proposed pipeline from Queensland.

The South Australian plants propose to use “coal to liquids” technology backed by Federal Resources Minister Martin Ferguson, while Zero Gen has proposed a new power station in Queensland using a “world first integration” of gasification and Carbon Capture and Storage Technologies to reduce emissions. The Queensland Government is also overseeing the development of two power stations as part of a massive new coal mining development in Central Queensland. They too are proposed to use CCS technology.  The Blueswater 2 coal-fired station in Western Australia is already under construction.

Based on companies’ and state government’s own emissions figures, often based on unproved technology such as CCS, these stations will produce 39 Mt of CO2-equivalent emissions, which will increase Australia’s emissions by 7% on 2008 levels. Both the federal Government and the Opposition have committed to decreasing Australia’s emissions by 5% on 2000 levels.

In NSW, the ALP’s disastrous handling of electricity privatisation has undermined the potential for gas-fired power to provide a transitional or complementary power generation technology, according to industry figures. All sectors of the generation industry expect the NSW Government’s current privatisation process — the schedule for which blew out last month — to collapse, meaning they will need to wait until the election of Barry O’Farrell next March to gain a clearer idea of the state’s direction.

Garbis Simonian is managing director of the Queensland Hunter Gas Pipeline project, which has obtained approval to build a gas pipeline from Queensland into NSW. That’s the pipeline that Macquarie Generation says it would run off if it opted for gas-fired power at Bayswater, although it would need to build a 16km spur to reach it. Simonian told Crikey the lack of certainty around electricity privatisation, and the NSW Government’s unwillingness to support gas over coal despite its lower emissions and water-use profile, made locking in base load contracts for the pipeline much more difficult.

“Gas is ideal for shoulder and peak power generation, because you can shut it on and off, which you can’t do with coal,” Simonian said. “There’s no growth in baseload power. No one’s building more smelters and heavy manufacturing plants. All the growth is in shoulder and daytime consumption.  Gas can work with both coal and renewables because you can turn it on when renewables aren’t available, and you can replace your power generation infrastructure with more renewables over an extended period.” But that won’t happen while no one in the sector can tell financiers what the regulatory framework will be in five years, let alone prices and contracts.

The NSW Government is also pursuing the Owen Report’s call for new baseload generation in NSW despite subsequent downward revisions in energy consumption projections.

As Alcoa’s announcement this week that it will source its electricity from Loy Yang Power’s brown coal power station until 2036 shows Australia’s energy future is as closely tied to carbon-intensive coal as ever.