In a move strongly rejected by climate action, the Labor opposition and even some of the industry itself the conservative Liberal-National federal government is threatening to build a gas power plant in New South Wales if the electricity sector does not commit to replacing coal-fired power stations that are being retired.
With the coal-fired Liddell Power Station in the Hunter Valley due to shut down in 2023, the Liberal-National government is worried there will not be enough dispatchable power, given the sector’s focus on building wind and solar farms.
The government is demanding electricity generators come up with a plan for 1000 megawatts of new dispatchable energy for the end of 2023.
If it is not satisfied with the private sector’s commitments by the end of April next year, Prime Minister Scott Morrison has vowed to intervene directly in the market.
“We won’t risk the affordability and reliability of the NSW energy system and will step in unless the industry steps up,” Mr Morrison said.
The government has tasked Snowy Hydro Limited with drawing up plans for a gas generator in the Hunter Valley at Kurri Kurri.
Mr Morrison pressed the government’s case for more non-renewable power generation in a speech to business and industry in Newcastle today.
Energy Minister Angus Taylor said the market needed to focus on new, dispatchable power, arguing current plans fall “far short of what is required”.
“Over the last decade, the private sector has not built a single new reliable power plant in NSW,” Mr Taylor said.
“The Government has always been clear; we need to see life extension or like-for-like replacement of Liddell.
“If industry steps up, we’ll step back.”
The potential for a taxpayer-backed, gas-fired power plant comes as the government turns its eye to the troubled gas market.
The east coast gas market has boomed under the development of Queensland’s coal seam gas fields over the last decade.
However, while that has made for a profitable liquefied natural gas export market, Australian commercial and industrial gas users have continued to pay high prices.
The Mr Morrison announced a sweep of measures aimed at addressing that imbalance, including:
- Setting up a National Gas Infrastructure Plan to identify the priorities for investment in the gas transport network
- Establishing an “Australian Gas Hub” at Wallumbilla in central Queensland for domestic trade
- Supporting an industry-led, voluntary code of conduct for gas producers and consumers (with the threat of a mandatory code if agreement is not reached by February 2021)
- Re-negotiating agreements with east coast gas exporters to ensure enough domestic supply at reasonable prices
- Supporting the development of five key gas basins, particularly Beetaloo Basin in the Northern Territory
The Federal Government is promoting the initiatives as moves that will both lower gas prices and create jobs.
Some of the strongest condemnation has come from the Climate Council, which said the government was making a bad bet on gas, throwing taxpayer funds at a dangerous fossil fuel, when what it needs is a plan to rebuild our economy and protect Australians from long-term threats.
“The Federal Government is trying to shore up the gas industry which is in a poor financial state.
“Meanwhile, the rest of the world is decarbonising,” said Climate Councillor and former president of BP Australasia, Greg Bourne.
“This announcement delivers no jobs in the short-term, and will only deliver huge uncertainty into the energy market,” said Mr Bourne.
“The economic and technological winds of change are driving us towards a renewables-led future, that is where private sector investment dollars are going,” he said.
“To reduce emissions, reduce power prices, create jobs, and reboot Australia’s economy, we need investment in clean, affordable, reliable renewable energy and storage technologies,” said the Climate Council’s CEO Amanda McKenzie.
The Australian Competition and Consumer Commission (ACCC) has long raised concerns that local commercial and industrial users are paying more for gas than exporters are selling it for on international markets.
The government’s focus on gas has drawn the ire of the renewable energy sector and environmental groups, which point to significant improvement in the capacity of wind and solar power to support the nation’s electricity needs.
The opposition Labor Party’s Climate Change and Energy spokesman Mark Butler questioned how many jobs would be created under the government’s plan.
“It’s heavy on spin, it’s light as a feather on substance. It’s hard to see where you get a single job from this announcement in the timeframe we need, in the deepest recession in a century,” he said.
He said a lack of investment in a replacement for the Liddell Power Station had been exacerbated by the government’s actions.
“If there is any slowness or reluctance about investment in that region it’s because Angus Taylor and Scott Morrison, and before them Malcolm Turnbull, for five years have tried every trick in the book to keep that 50-year-old coal fired power station open,” he said.
However, Australian Greens Party leader Adam Bandt accused Labor of going easy on the government, by failing to reject gas as an option.
“Renewables are getting cheaper and gas keeps getting more expensive, so Scott Morrison’s plan to tie Australia to gas is just a plan to throw public money at his mates in the gas industry,” he said.
“We need to help households and business make the switch from gas to electricity, not push more gas on them.”
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One Response
Absolute criminal corrupt bozos.