IPA Today

A Tale Of Two Cities

Written by
15 September 2022
Originally appeared in The Spectator Australia

It is a tale of two cities. First is Barcaldine, Queensland, which has been left reeling after a proposed coal-fired power station was recently crushed by state and federal Labor governments worried about carbon emissions.

Second is Ordos, Inner Mongolia, where locals are celebrating the commissioning of phase one of their new Shanghaimiao power station with 1,000 megawatts coming online. Workers are in the process of completing phase two, which will take total capacity up to 2,000 megawatts.

Interestingly, the capacity of Shanghaimiao is similar to the capacity of the Eraring power station in New South Wales, which Origin Energy plans to close in 2025 due to economic pressure from heavily subsidised renewable energy projects.

In both Barcaldine and Ordos, the power stations shared a commitment to the latest ‘ultra-supercritical’ coal-fired power station technology. This means less coal is required to generate each megawatt of electricity and, therefore, fewer carbon emissions are produced.

The key difference is the one in China was built, whereas the one in Australia remains locked in red and green tape hell.

Australia’s was held back despite the abundance of affordable and reliable energy it would generate, the 545 jobs it promised to create during construction, and the 90 ongoing operational jobs.

The determination of state and federal Labor to block the construction of coal-fired power stations is in stark contrast to China. According to a report in the New Scientist in April, China is building more than half of the world’s new coal-fired power plants.

China accounted for 52 per cent of the 176,000 megawatts of energy under construction around the world in 2021. In just one year alone, China added three times more coal-fired power generation than exists in Australia today.

Australia has an abundance of high-quality coal which has proven to be a lucrative export commodity for generations. When burned, it allows other nations to access affordable and reliable electricity, and in many cases, has helped lift them out of poverty.

Yet Australia’s leaders stand silently by while our affordable and reliable baseload electricity, generated by that same coal, is replaced by highly subsidised renewables that require vast amounts of backup energy and extra transmission lines to work. All of this adds a huge cost to taxpayers.

The Minerals Council of Australia, a club for the major mining companies, has boasted of the hundreds of new high efficiency, low emissions (HELE) coal-fired plants in operation or in planning and construction.

The MCA even spruiked how these plants could deliver ‘reliable, base-load energy while reducing CO2 emissions by up to 40 per cent’ saying:

‘Coal has a fundamental role to play in the provision of low cost, reliable energy for the foreseeable future.’

Meanwhile, the MCA makes no mention about how Australia would be able to benefit from these new technologies.

Is it because key MCA members vocally endorse Net Zero in order to provide the requisite political cover from activists to continue to mine and export coal, all while our domestic power supply is being thrown under the proverbial bus?

It’s hard not to think this is why they led the charge to close down the Australian Coal Association and its ‘Coal21’ outreach program, which was devoted to the roll-out of new technologies.

The stakes for Australian domestic and industrial energy users are high.

In Victoria, the ageing Hazelwood power station was closed with just six months’ notice in 2017, resulting in a wholesale power price jump of 85 per cent. The imminent closure of Liddell Power station in the Hunter Valley will, no doubt, have a similar effect.

Had these power stations been replaced in an orderly and sensible manner using the latest technologies, the National Electricity Market would still have an abundance of affordable and reliable energy, instead of being in the midst of the current energy supply crisis.

In addition, environmentalists could have welcomed the reduced amount of carbon emissions associated with ‘ultra-supercritical’ power-generating technology.

The key remaining coal-fired power plants in Australia slated for closure in the next decade should all be maintained, refurbished, and operated until such future time as baseload generation is available, either from high-efficiency, low-emission coal or nuclear sources.

Queensland Senator Matt Canavan gets it right when he says:

Remember when they said there was no one that wanted to build a coal-fired power station? Then when someone says, “Yes, I do!” They say, “Sorry, you can’t get approval…”’

China, which has firmly rejected the policy of Net Zero emissions by 2050, is getting on with the job of providing reliable and affordable power for its people and industries.

If Australia had the same attitude, communities in the Galilee Basin could look forward to an influx of new jobs, and Queenslanders could be more confident of enjoying efficient, affordable, and reliable energy well into the future using the coal beneath our feet.

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Scott Hargreaves

Scott Hargreaves is the Executive Director at the Institute of Public Affairs

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