http://reneweconomy.com.au/2013/burying-our-heads-in-the-coal-in-...

http://reneweconomy.com.au/2013/burying-our-heads-in-the-coal-in-victoria-38490

"For instance, it’s now clear from analysis like that was released by Deutsche Bank that global thermal coal markets are peaking, and many planned new coal mines and ports in Australia will be shelved. China is poised to cap emissions and ban the import of low grade coal."

A powerpoint presentation by Energy Minister Nick Kotsiris mentioned renewable energy once, but it was only to point out that his government had introduced a new, lower solar feed-in tariff. Rather the year ahead was all about developing the state’s ‘earth resources’- code for brown coal reserves....

This money is to prepare the way for a proposed coal allocation of 13 billion tonnes of unallocated coal in the Latrobe Valley, about which the Minister promised some news later this year. Other priorities identified for the year ahead included “realise the potential of brown coal through the Advanced Lignite Demonstration Program”...

Victorian governments past and present have always been mesmerised by the size of the Latrobe Valley brown coal deposit and harboured fantasies of its ‘liberation’. But there’s always at least been lip service, and sometimes actual attention and support, paid to the State’s renewable energy sector also. Not anymore. While the Coalition in Opposition promised to fulfil the State’s target to reduce emissions by 20 per cent by 2020, to source 5% of the State’s electricity from solar power by 2020 and to improve the average standard of Victoria’s homes to 5 stars, these promises seem to have been forgotten in Government.

Instead, it’s full steam ahead with blocking wind farms, reducing support for solar power, reviewing the highly successful Victorian Energy Efficiency Target and pursuing a brown coal export industry....

And the central plank of the Government’s vision for energy is to try and develop a brown coal export industry, despite countries like China flagging a ban on import of low grade coal. It’s not just environmentally irresponsible, its economically illiterate.

"It all begs the question, what’s going on in Victoria and why does the State Government think we are immune to global trends and challenges?"
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Mark - I'd say the Vic/Fed Govts are fully aware of the global trends and sense that LV BCE is in a "sweet spot". Very low ash/sulphur and in Coldrys case...ONLY clean water as a "waste product"....with a Matmor madness steel industry down the track...?

But given the global trend of thermal coal pricing - its the compelling enonomics of eg Coldry that IS the underlying REASON for the Govt's bullish "on the front foot" stance.

* Newcastle needs ~$90 to break even - unsustainable LT.

* LV/Coldry needs ~$80-$90 (imo) to keep ALL stake holders very happy LT...inc Govts, off takers, AGL etc, and ESI s/holders. Note too that Coldry would be utilising existing S7 LV coal...meaning reduced community/green friction. Significant.

An $AUD decrease in years to come below 90c - will massively improve the economics of all Oz coal exporters/wannabees.

Its logical that the dirtier/high cost NSW/QLD producers will suffer and that the cleaner/lower cost VIC producers will prosper going forward. And the recent moves by the Chinese/Indonesian Govts to restrict import/export of low grade coal also plays into the hands of BCE Vic.

One thing is for sure - the Fed/Vic Govts ALREADY have at least one drying tech in their sights that they are absolutely convinced is a true game changer.

tick tock...