No new coal-fired power plants will be built in Australia, says CS Energy
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Australian Broadcasting Corporation
Broadcast: 16/02/2017
Reporter: Hayden Cooper
One of Australia's major electricity generators, CS Energy, has dismissed Malcolm Turnbull's call for the construction of new coal-fired power stations.
Transcript
LEIGH SALES, PRESENTER: Part of the political emphasis on cost of living includes energy prices and that heated debate we've seen this past week - pardon the pun!
Tonight, the chief executive of a major electricity company is speaking about the Prime Minister's push for more efficient coal-fired power stations.
CS Energy produces a third of Queensland's power, and runs two of the most advanced coal-fired plants in the country. But the company's CEO says he has no plans to build more, because the economics doesn't stack up.
Here's national affairs correspondent Hayden Cooper.
HAYDEN COOPER, NATIONAL AFFAIRS CORRESPONDENT: The port of Gladstone in Queensland - the gateway to one of Australia's largest coal reserves, the Bowen Basin.
I'm here in search of Malcolm Turnbull's utopia - a future in which highly efficient coal-burning power stations form the backbone of Australia's energy grid.
MALCOLM TURNBULL, PRIME MINISTER: Turning to coal...
NEWS READER (Archival): Like so many other things in Australia, coal mining began with convict labour.
HAYDEN COOPER: It fuelled the industrial revolution, and helped build the nation.
But as early as the 1960s, coal, as an energy source, was under pressure.
BILL SPOONER, MINISTER FOR NATIONAL DEVELOPMENT (1951 to 1964): I think that coal will have increasing competition in the future, not only from oil, hydroelectric power as well.
HAYDEN COOPER: It was just the start, as the science of global warming became clear, coal got a bad name.
A new world of energy diversity was emerging and with it came a political fight over reliability.
SCOTT MORRISON, TREASURER: This is coal. Don't be afraid. Don't be scared.
SPEAKER: The Treasurer knows the rule on props.
SCOTT MORRISON: It's coal.
HAYDEN COOPER: In 2017, coal-fired power has a new champion - a Government that wants to build new, more efficient power stations known as ultra-super-critical plants.
MALCOLM TURNBULL: We do not have one modern high-efficiency, low-emissions coal-fired power station, let alone one with carbon capture-and-storage.
HAYDEN COOPER: So, why are we here? Well, about an hour and a half from Gladstone in central Queensland, there's a power station that is pretty much the closest example that we have in Australia to the new-found ideal of the Prime Minister.
It's a super-critical plant called Callide C.
Built in 2001, there's only four of these in the country. This one is run by Queensland Government-owned, CS Energy.
MARTIN MOORE, CEO, CS ENERGY: You can get more bang for your buck. So, as you run the boiler at high temperatures and pressures, you can actually generate the same amount of electricity using less coal, and so obviously less emissions as well.
So when you compare this to brown coal power stations down in the Latrobe Valley, this would have about 25 per cent less emissions than you'd find from there.
HAYDEN COOPER: As CEO Martin Moore showed me how the plant works, I wondered what he thought about the next level up in coal-fired power - ultra-super-critical plants. The answer was a surprise.
MARTIN MOORE: It's not game-changing. You've still got to think that ultra-super-critical produces twice the emissions of gas-fired technology.
HAYDEN COOPER: So would he, the CEO of a coal-powered generator, build one?
MARTIN MOORE: Well, I think CS Energy certainly has no intention of building any coal-fired power plants, ultra-centre super-critical or not.
And it would surprise me greatly if there was any more coal-fired technology was built in Australia.
I think when you look at the risk of the investment, you're talking about $2 billion-plus investment up-front. These assets have a plant life of roughly 40 years, and so it's a very, very big long-term bet.
So given the current uncertainty, I think it would be a very courageous board that would invest in coal-fired technology in Australia.
HAYDEN COOPER: Stepping back and the body that represents all the major power generators offers the same critique of the Turnbull doctrine.
MATTHEW WARREN, AUSTRALIAN ENERGY COUNCIL: Plans for expansion to coal-fired power stations has been basically shelved over the last decade.
We're now looking at gas and renewables as the mainstay of the investment for us, at least for the next 10-20 years.
HAYDEN COOPER: In Canberra, the rumour is that the Government might seek to subsidise construction of new coal plants.
But even its own funding body, the Clean Energy Finance Corporation, is dubious.
OLIVER YATES, CLEAN ENERGY FINANCE CORPORATION: It's not really a technology which, ah, would be one that is likely to have a long-term path, and therefore would, again, be very risky for the taxpayer to invest in.
MATTHEW WARREN: Anything's possible with Government subsidies, but there isn't really much appetite.
I mean, it's still got to be owned and run by the business, unless the Government chooses to build it itself. And I think we're seeing that the industry's moving towards - it's a market, it's private business, it is asked to invest in this and we anticipate that will continue in the future.
HAYDEN COOPER: So who's pushing the idea of new coal plants in Australia?
Naturally enough, it's the organisation that responded to the Treasurer's request for an exhibit to show-and-tell.
BRENDAN PEARSON, CEO, MINERALS COUNCIL OF AUSTRALIA: Well, there are not many places around Canberra that have coal in their offices. So we were happy to oblige.
HAYDEN COOPER: The Minerals Council, which represents the big coalminers, maintains that ultra-super-critical is taking off, and can do so here as well.
BRENDAN PEARSON: Everywhere else in East Asia, countries are embracing this technology, and have done for a decade.
So I think it makes sense that we - given we've got the coal - to also see, to check out this technology and I think investors, over time, given an even playing field, will embrace it.
IAN DUNLOP, FORMER COAL EXECUTIVE: Those coal plants in Asia, whilst they're all fine on paper, a large number of them are basically being cancelled or mothballed, and the big push is moving away from that.
HAYDEN COOPER: Ian Dunlop is a former oil industry executive and head of the Australian Coal Association in the '80s when the term "clean coal" first emerged.
IAN DUNLOP: "Clean coal" is an oxymoron. I mean coal is not clean. You can have cleaner coal, but it's not clean coal.
HAYDEN COOPER: These days, he campaigns for a cleaner planet, and Australia, he says, cannot meet its Paris climate targets if coal power remains in the energy mix.
IAN DUNLOP: The pressure on us is going to be enormous and the fact is that, if we go ahead and do the things the Prime Minister's talking about, you're going to lock this in for the next 40 or 50 years.
So, to use the political vernacular, I mean, Australia is pretty much the world's biggest leaner - not a lifter in any way.
HAYDEN COOPER: Of course, there's one other way to inject some proper meaning into the phrase "clean coal" and that is through carbon capture-and-storage.
So, the concept of taking the emissions from a plant like this and storing them underground.
Now the problem is that this technology just hasn't really taken off in Australia.
In fact, in the whole world, there's only 15 successful operations of carbon capture-and-storage under way.
None of them is here.
CS Energy knows this, because it tried it.
MARTIN MOORE: We proved that technologically it's possible to retrofit this to an existing coal-fired plant, but commercially the numbers don't stack up.
So it would take a very, very big investment plunge to try and get CCS moving, which we're not seeing coming forward.
HAYDEN COOPER: It's correct to say that there's no commercial operation in Australia yet of CCS?
MARTIN MOORE: No and it's unlikely there will be. I think that technology may well be bypassed.
HAYDEN COOPER: Really? Simply because of the cost?
MARTIN MOORE: Simply because of the economics, yes.
HAYDEN COOPER: So what do you think when you hear the phrase "clean coal"?
MARTIN MOORE: Well, clean coal, theoretically, is about that carbon capture-and-storage. So if you could decarbonise coal by capturing and sequestering the emissions, then you'd have clean coal.
It sounds easy if you say it fast enough, but it's not that simple.
http://www.abc.net.au/7.30/content/2017/s4621395.htm
