Both sides needs to come clean on this great pivot back to coal
Malcolm Turnbull thinks the community has a low opinion of politicians because of the Gold Pass travel perk and recent abuses of travel allowances. He’s right about that, but it’s more than that.
The sudden re-emergence of clean coal technology as the panacea for all that ails our energy security and the environment is an example of our political leaders taking us for mugs. The Prime Minister says we have a “vested interest” in making “state-of-the-art, clean coal-fired technology” work. He points out that since 2009 Australia has invested $590 million in clean coal technology research and demonstration.
What he doesn’t say, but many of us in the community remember, is that the Coalition government — and the Labor government before it — cut even more than that.
In 2014, the Abbott government cut $459m over three years from the carbon capture and storage flagships program. Rightly or wrongly, this is what they really think of the prospects of this technology. And it’s been a bipartisan view — having made the initial promise of $2 billion over nine years, the Rudd and Gillard governments proceeded to strip hundreds of millions from the flagships program.
The related Low Emissions Technology Demonstration Fund and the Low Carbon Communities program have also ceased to be funded, along with the Coal Mining Technology Abatement Support Package.
Having decided to get out of clean coal, we’re now getting back into it. Presumably there’s been some kind of breakthrough or revelation to prompt this about-face, but a quick review of the preliminary report of the Independent Review into the Future Security of the National Electricity Market, written by an expert panel chaired by Chief Scientist Alan Finkel and released only a few months ago, shows no such thing.
Carbon capture gets a mention (just once) but the report stresses that it “makes no judgment about its future role”.
Nonetheless, we’re poised for a multi-million-dollar energy policy re-pivot.
Given the abandonment of funding and the clear signals we’ve been sending to the scientific and commercial world, all the momentum, research impetus and private sector goodwill we previously enjoyed has evaporated.
It’s back to square one, with a need to resurrect previously scuttled demonstration plants to try to make carbon capture and storage a reality.
Which brings us to the funding. It would be reasonable to expect a reversal of some of the previous cuts in the upcoming budget and, in the interim, senior ministers have singled out the Clean Energy Finance Corp as a possible funding source for specific projects.
Assuming the government’s definition of “state-of-the-art” clean coal is carbon capture and storage (and that the objective is to achieve substantial emission reductions, rather than incremental improvements that would come from updates to existing technologies), then hopefully someone has read the relevant act closely because it is very specific about the types of technologies in which we can invest.
Along with nuclear technology, investment in carbon capture and storage technology is banned.
Section 62 of the Clean Energy Finance Corporation Act 2012 deals with “prohibited technology” and states that “an investment for the purposes of the corporation’s investment function is an investment in a prohibited technology if it is an investment in technology for carbon capture and storage”.
There are also challenging requirements for certain benchmark rates of return on investments and section 58 of the act mandates that “at any time on or after 1 July 2018, at least half of the funds invested at that time for the purposes of its investment function are invested in renewable energy technologies”.
With this considerable legislative roadblock, how else to find the money, because these things are expensive?
Construction costs of about $2bn are usually what’s cited and that was certainly the expected cost of a full carbon capture and storage coal-fired plant in the US state of Mississippi that is about to come online. It ended up costing $9bn, making it one of the most expensive power stations ever built, and included about $500m in grants from the US government. That’s about as much as we’ve spent in toto since 2009, but only for one plant.
Our on-again, off-again track record hardly provides the sort of certainty that would encourage investors, either domestic or international, to get involved. And then there’s the impact of more and more consumers going “off-grid” as rooftop photovoltaic technology advances rapidly, leaving those behind with ever increasing power bills and our power stations as possible stranded assets.
