Coal station deal raises eyebrows - Chinese company signs contract

Age
Monday 13/9/2010 Page: 7

A CHINESE company has signed a contract to build a coal fired power station in the Latrobe Valley, despite concerns about the plant's greenhouse gas emissions. State-owned China National Electric Equipment Corporation announced it had signed an engineering, procurement and construction contract with Melbourne coal technology company HRL for the $750 million-plus plant. The announcement, published in the China Daily and confirmed yesterday by HRL, comes as the company continues to seek environmental approval for the station, which would use new gasification technology to reduce greenhouse gas emissions from burning coal.

The Age believes an HRL subsidiary. Dual Gas, has submitted a revamped application to build the Morwell plant with the state's Environment Protection Authority. An initial application was withdrawn last month after the company was warned the proposal failed to meet emissions standards for new power plants announced in July. Premier John Brumby set a limit of 0.8 tonnes of CO2 perMW hour of energy generated, effectively banning new power stations using traditional brown coal technology.

HRL had estimated its plant would have average emissions of between 0.78 and 0.89 tonnes perMW hour approximately equivalent to a modern black coal power plant. It is believed the company's new application will comply with the 0.8 tonnes limit, possibly by using less synthetic gas derived from coal and more natural gas than initially planned. The China Daily described the 600-MW HRL plant as the first power station set up by a Chinese company in a developed country, and the "largest clean energy power project by lignite [brown coal] gasification technology by far".

But environmentalists have criticised the plant and the state government, accusing it of introducing emissions standards that fail to back up its commitment to limit pollution contributing to global warming. The average emissions intensity of power stations across wealthy nations is about half the Victorian standard about 0.45 tonnes of gas perMW hour. Originally promised to start operating in 2009, the HRL demonstration plant has been continually delayed despite $150 million backing from the federal and state governments.

HRL declined to comment on the new application. If the EPA agrees to accept it, the application will be posted online and a call issued for public submissions. Friends of the Earth campaigns co-ordinator Cam Walker said Mr Brumby must intervene to stop the plant being built if the state was to reach its target of a 20% cut in emissions by 2020. "We know they don't know how they are going to get to 20% at this point, and they are going to need every tonne [of CO2] they can find in terms of mitigation", he said. Business groups have backed the development of new, lower emissions coal plants as vital to secure the energy supply.