Power station plans shelved

Australian
Thursday 29/11/2007 Page: 6

PLANS for new coal-fired power stations have been shelved until at least 2020, when technology to capture and store greenhouse emissions may be available. In the wake of Kevin Rudd's emphatic victory, generators said yesterday it was now too risky to consider building a coal-fired power station unless its emissions could be significantly reduced when faced with Labor's commitment to make cuts of 60 per cent by 2050. The National Generators Forum, representing the 22 main utilities, expects rising demand for electricity until 2020 to be supplied mainly by new gas-fired power stations and wind farms.

Electricity prices are certain to rise as gas releases about half the greenhouse emissions of coal but is close to 20 per cent more expensive. Wind-generated power is about double the cost. NGF executive director John Boshier said Labor's 20 per cent Mandatory Renewable Energy Target by 2020 would supply about 45,000 gigawatt hours, or half of new generation capacity.

Technology to capture and store emissions from coal and gas-tired power stations is under development, but not expected to be commercialised until 2020. "Unless a new coal-fired power station was capture-ready, it would be unlikely to be built in the present environment and I think investors would look at it as too risky," Mr Boshier said. "Coal-fired power stations will keep going until the end of their economic life, but what that means is to achieve big cuts in emissions new power stations have to be low-emission. And, so, building new coal-fired power stations doesn't help to achieve that target." One big coal and gas generator, TRUEnergy, has committed not to build any new coal-fired power stations.

State governments are increasingly looking to the private sector for new investment in electricity generation, with growing speculation that the Queensland and NSW governments are considering privatising utilities. The Queensland Government sold off state-owned electricity retailers late last year, and the NSW Government is expected to announce the future of its generators and retailers at the end of this year. The pessimistic view of generators is not shared by the main coal-mining union, which says investment in coal-fired power depends on the details of climate change policies to be unveiled next year.

Construction Forestry Mining and Energy Union general president Tony Maher said governments or the private sector would build new coal-fired power stations if they were guaranteed a share of the expanding energy market. "It's only a matter of taking a bit more risk," he said. "The private sector will build it if there is a guaranteed market share."