New coal-fired power has failed to make the cut in a shortlist of new generation projects released by the Morrison Government. The Coalition unveiled a selection of 12 projects that could potentially receive taxpayer support as part of its Underwriting New Generation Investments (UNGI) program.
The government chose from 66 submissions to the underwriting scheme, which closed in January. With an election looming, it needs to shore up votes in regional seats with announcements on big infrastructure.
However, despite calls from QLD Nationals, new coal plants did not make the shortlist.
Five proposals are for gas plants, with six for pumped hydro and storage. The list also includes Tasmania’s Battery of the Nation plan, and represents a combined 3,818 MW of new generation.
Of the 12 shortlisted projects, just one refers to coal. The government has agreed to upgrade the ageing Vales Point coal-fired station at Lake Macquarie in NSW.
Underwriting existing coal power could spook investment
The Clean Energy Council said UNGI funding the extension of Vales Point could kill investment in renewable energy.
This includes a solar power and battery storage boom that was worth billions to the Australian economy in 2018 alone.
CEC chief executive Kane Thornton said the idea was at odds with the ACCC’s original recommendation on lowering electricity prices.
ACCC recommendation to underwrite new generation
In June 2018, the Australian Competition and Consumer Commission released its final report on retail electricity pricing in Australia. It recommended the government operate a program to buy power at a low fixed price from new generators after a period of five years.
This would then give investors in new energy generation certainty on their returns and, consequently, lower household power bills.
However, submissions from retailers to the ACCC made it clear that a failure by government to deliver stable climate and environmental policy had resulted in “significant investment uncertainty”.
Underwriting New Generation Investments: No new coal
Despite the absence of coal in this first round of Underwriting New Generation Investments projects, the Federal Government said it will continue to engage with proponents of coal power.
These include a new high-efficiency low-emissions (HELE) coal plant in Collinsville, Queensland. In addition, the government will spend 10 million over two years developing a roadmap for firm generation projects.
The roadmap will also explore technologies that meet UNGI guidelines – including coal, gas and biomass.
