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A high-efficiency, low emissions (HELE) coal-fired station would cost less than the almost A$3 billion (roughly $2.3bn) of subsidies handed out for renewable projects each year, a study published Monday argues.
According to the report released by the Minerals Council of Australia and COAL21 Fund — a nest egg owned by local coal producers —, the sum required to build a 1000MW ultra-supercritical (USC) coal-power plant is A$2.2bn.
The figure, based on data compiled by power and energy sector specialists GHD and Solstice Development Services, not only is lower than the total subsidies for renewables, but it would generate the cheapest electricity on the market, the study says.
Source: BAE Economics for Minerals Council of Australia.
A HELE coal plant would produce electricity at $40-$78 per megawatt hour, compared with gas at $69-$115/MWh and solar at $90-$171. That means, according to the study, that clean-coal plants could drive down energy prices in Australia.
That outcome would be more than welcome by consumers, which are bracing for a 20% increase in electricity costs between 2017 and 2018.
On top of that, an increase in electricity demand paired with a drop in supply since 2014 have strained the Australian grid, causing outages amid heat waves and storms. The worst — an eight-hour blackout in South Australia last year — crippled industry for up to two weeks and triggered public outrage.
Getting new-generation coal plants across the line wouldn’t be an easy task. Not only the federal government would likely face fierce opposition from environmental groups, but also it would have to solve what David Byrne, researcher and lecturer in economics at the University of Melbourne calls “the energy trilemma”:
In the face of rapid technological change in the energy sector, policy needs to evolve to achieve three objectives:
- meet Australia’s Climate Change commitments under the Paris Agreement;
- ensure stable supply of energy so the ‘lights don’t go out’ (again);
- mitigate rising electricity costs, particularly for vulnerable and elderly households.
Addressing this challenge is akin covering a floor with a rug where the rug is just a bit too small.
- coal-fired power plants have provided stable, low-cost energy supply to Australians for years, yet they are very heavy polluters;
- wind and solar energy is clean with zero production cost once windmills or solar panels are in place, but they only generate power when the wind blows and sun shines, thereby creating energy supply instability;
- natural gas is significantly cleaner than coal and can readily provide stable energy supply, but its cost is rapidly rising on the international market.
In short, each of these three primary sources of power solves two of three problems. No matter how you position the rug, one of the corners of the room is uncovered.
(Taken from: Minerals Council of Australia’s report.)
In addition, authorities would have to deal with the fact that none of the country’s major generators — AGL Energy, Engie, Origin or EnergyAustralia — wants to build new coal -fired plants, as their customers and shareholders push for cleaner energy.
Coal -fired power has fallen to around 63% of Australia’s total generation as of 2015, official data shows, down from around 80% in 2000.
13 Comments
JoeR_AUS
There is no silver bullet!
What Australia needs to do is put to tender each time we need to sunset any existing infrastructure or provision new infrastructure.
This way, what ever the market players can design and cost vs the requirements of what they are replacing, meanwhile they will have to reduce pollution.
This will allow technology improvements a chance and you don’t have to pick which technology is the winner!
jorge
“According to the report released by the Minerals Council of Australia and COAL21 Fund — a nest egg owned by local coal producers..”
.
Ugh…
Richard Bulman
Looking forward to the 8 to 12 times hike in power prices. I guarantee we Queenslanders are subsidising the greenies in South Australia.
niik
saying i have clean coal is like saying i have healthy cancer
Mike Westerman
The flimsiness of this report is immediately apparent, and the authors will deserve all the opprobrium they cop. Both non-firm solar and wind BID prices (ie not some consultant’s guess) are well below the figures on the graph, the price I can get for for a Tesla Powerwall 2 NOW plus my latest solar system is already NOW less than wholesale power plus network charges to get the power to my door. The costs for large scale solar plus pumped hydro UNSUBSIDISED NOW is less than their projected emissions free HELE, even tho’ the pumped hydro solution uses proven technology while CSS on USC has never been commercial anywhere.
So was the intention to destroy the last shred of credibility of the coal industry or just generate noise?
Guo.au
Coal is cheaper. So what?! The point is it’s not the time to focus only on cost. Reducing CO2 is much more important and urgent! I don’t care if renewable energy is more expensive. If people can’t afford it, they should change their way of life. For a start, don’t wear like summer at home in winter!
Dan Fargo
seriously they should also investigate the small modular nuclear reactor designs – about 300-400 mega watt they can be placed at existing transmission centers –
patentbs
Do not deal in absolutes! You are wrong to say “no solar”; “no wind”; “no coal”; “no nukes”. The first CCS sites are operational and data is being gathered daily. It may OR may not be a winner.
I do believe the electrical energy future (40 years out) will include a mix of ‘utility’ scale energy supplies. The big winner will be a flex system that can offer storage, and low impact production.
As an aside – the report says solar and wind have no cost after installation. (I assume it means PV solar) WRONG. The technologies have maintenance and depletion issues. The advantage is they require NO FUEL.
Pretty feeble report generation! You can do better.
Enoch Pax
I hope this really pans out.
Mark
Clean coal technologies were developed to meet a power need, using coal, and meeting environmental requirements. All technologies offered, including char manufacturing as a bonus – MUST be evaluated. The need is there, I am certain that the workable technology is also there – move forward, after all the arguments are assessed. This is GREEN, but now only political.
James OConnor
This is a pretty disapointing piece of journalism Cecilia. The use of ‘marketing’ terms like “clean-coal plants” is unsubstantiated and misleading. There are no ‘clean-coal plants’. Show me the effective CO2 sequestration coal plants?
Your failure to mention that South Australia’s loss of power was due to infrastructure damage (storms) and not its use of renewable energy again indicates your selective bias.
Solar, wind and other renewables combined with effective battery storage technology will revolutionise the energy sector – not coal. It’s time to move forward not backwards.
I expect better from Mining.com and read your publication because I have a Geophysics degree so please don’t bother writing this type of ‘clean coal’ propaganda.
JReay
There is no such thing as “clean coal”, period.
hfrik
OK, so 3 billion $ of subsidys for 1 GW now coal fired capacity. WOW.
For the same subsidy you get 100 TWh of wind and solar power in germany, with sun and stronger wind in Australia this can easily rise to a infinite amount of TWh, since some build wind and solar without subsidies alreaady. So what use should the coal power be beside pulluting a lot?
Better spend the 3 billions in installing a high voltage grid that#s worth the name. To make the power available where it’s needed and allow to produce the power where it’s cheapest. Wich 30% subsidy this could finance 5000km 400kV Power lines with a capacity of 2,5-3GW and n-1 redundancy. Which would be a gamechanger in Australia.