How you’ll foot bill for ‘clean coal’

The government will consider so called ‘clean coal’ technologies to ensure Australia’s power supplies are reliable.


THE Turnbull Government is joining a global quest to redeem coal as an economically and environmentally acceptable power source.

Or it is ramping up a political assault on Labor over the issue of electricity prices and reliability.

The politics of coal dominated the first two-week sitting of Parliament with the government accusing Labor of over-reliance on unreliable renewables, which it said were pushing up household electricity costs.

This intrusion of raw politics on energy policy has meant both sides have had to juggle fiercely, and many voters would not be able to see the options for the game-playing.

But the government is not hiding its bid to scrub coal of its unwanted emissions and keep it in the power cycle to peg cost rises.

Before householders start applauding they should realise they will be paying for it.

And any clean-coal breakthrough could be a long way off.

That redemption is possible, but it would take a lot of time and money to complete, and a lot of patience from consumers watching electricity bills go up.

One prime area of coal hope is carbon capture and storage. This process would prevent the pollutants hitting the atmosphere, but so far there are few if any large-scale successes, and none at a low cost.

And it seems taxpayers broadly will be funding much of the preliminary investment should a clean coal project be launched.

So at a time when renewable energy sources are — as Prime Minister Malcolm Turnbull has acknowledged, getting cheaper — cleaning up coal will become more expensive.

Ministers have confirmed the government wants to help private enterprise to overcome reluctance in one important area — construction of coal-fired power stations. The market won’t go there

because of the initial expense and the long lag time for a solid return.

These same reasons mean it would be hugely unlikely the government would build its own coal-fired generator. That would require a big monetary risk, and would reverse three decades of privatisation.

Treasurer Scott Morrison handles a lump of coal during inside the House of Representatives earlier this month. Picture: AAP Image/Lukas Coch

Treasurer Scott Morrison handles a lump of coal during inside the House of Representatives earlier this month. Picture: AAP Image/Lukas CochSource:AAP

However there will be government investment, through a widening of the brief of the $10 billion Clean Energy Finance Corporation to include coal.

This would require what Energy Minister Josh Frydenberg calls “a new mandate” for the CEFC, which presently looks a renewable energy projects.

This revised mandate is considered urgent by the government because it sees a long-term need for coal, until battery storage for renewables is sufficient to make the wind, solar and other clean energy sources reliable providers of base load requirements.

So far only coal can keep the electricity flowing when the sun sets and the wind drops.

“We’re going to look at all our options because of the challenges that we face, namely to ensure energy security [and] energy affordability, as we transition to a low-emissions future,” Mr Frydenberg said.

“Right now we need more base-load power. Cleaner coal is one of those options together with gas-fired power, as well as ensuring more storage capacity for intermittent sources of generation, namely wind and solar.”

However, last week the CEFC’s departing chief executive Oliver Yates told a Senate committee the corporation had its doubts.

“To be honest, in a market of such volatility it would be very difficult to find a private operator or commercial investor investing in coal-fired power stations in the Australian market today,” he said.

“We, like a commercial investor, are very unlikely to find circumstances in which that would be an appropriate investment to expose taxpayers to.”

Labor’s energy spokesman Mark Butler said of the CEFC plan: “This would be an outrageous act of vandalism against a successful financing mechanism for renewable energy, for energy efficiency projects and for genuine low-carbon technology.

“It’s no real surprise, I guess, because the Liberal Party has never really supported the CEFC.”

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