Antinuclear

Australian news, and some related international items

Turnbull govt wants to use Clean Energy Finance Corporation to finance new coal power stations

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The stranded asset risks of investing in new coal-fired power plants are clear to almost all,” Buckley said. “At some point a carbon tax or ETS is inevitable and would need to be priced in.”

Buckley said if that happened, the CEFC could well be stranded with any loan it’s given to coal power stations.

How Malcolm Turnbull could ignore the facts and fund the myth of ‘clean’ coal, Guardian,   2 Feb 17  The Coalition could use the Clean Energy Finance Corporation to finance new coal power stations but it wouldn’t be cheaper than renewables Just a few months ago, the idea that a new coal power station would ever be built in Australia seemed laughable. Banksenergy companies and even the Turnbull government seemed to accept the inevitable decline of the coal industry.

But, since then, the Turnbull government has been furiously talking up the idea of “clean” coal. And while no bank is likely to finance the building of a new coal-fired power station here, Turnbull and his ministers have been indicating the government might themselves fund them.

There’s been a lot of spin in this debate, so here are some facts……..

The Clean Energy Finance Corporation cannot currently fund coal (but the government could change the rules) Turnbull ministers have indicated they might use the Clean Energy Finance Corporation to finance new coal power stations. “It’s called the Clean Energy Finance Corporation, not the ‘Renewable Energy Finance Corporation’ – that’s an important distinction,” said the energy and environment minister, Josh Frydenberg, on ABC Radio National on Thursday.

It does seem possible the government could use the CEFC to fund coal but it requires some serious contortions.

The existing CEFC legislation explicitly rules out the funding of carbon capture and storage technology. So without changing the legislation, they would be only be able to fund plants that don’t use that technology.

But the CEFC could only finance a coal power station if it determined it was a “low emissions technology”. However, the act does not directly define what a low emissions technology is. Instead, the board must make guidelines that define the term.

The current guidelines interpret “clean energy technology” as one that produces 50% fewer emissions than the rest of the electricity grid. That seems reasonable and would rule out the funding of any coal power plant.

n 2015 the national electricity market produced 0.81 tonnes of carbon-dioxide equivalent for each megawatt hour of electricity.

Now, the most advanced coal power stations in the world currently emit about 740kg of carbon dioxide for each megawatt hour of electricity. That’s less than a 10% improvement over the existing electricity grid.

(Advanced versions of the plants, which don’t currently exist, could potentially reach 640kg per MWh, which even then is only a 20% improvement over the existing grid.)

No coal power station will fit within the current definition of “clean energy technology”.

Frydenberg could write a new investment mandate, telling the CEFC that coal technology should be financed. That would probably force the CEFC to change their definition of “clean energy technology” to be consistent with ultra supercritical coal.

So, in effect, the government would need to force the CEFC to change the definition of “clean energy” from one that is 50% better than the existing tech to one that is just 10% or 20% better.

And that’s just compared to Australia’s relatively dirty grid. The most efficient coal power stations are significantly more polluting than the average of electricity generator in other OECD countries, which the International Energy Agency said was 420kg per MWh in 2014.

All that aside, the CEFC would still need to decide that investing in a new coal power plants was a good commercial decision, since they need to make money on their loan. They would also need to find an energy company to build the plant. But, with most energy companies saying coal is a bad bet, it’s hard to see how that could happen.

Tim Buckley from the Institute for Energy Economics and Financial Analysis said the CEFC would likely see the loan as a bad bet.

“The stranded asset risks of investing in new coal-fired power plants are clear to almost all,” Buckley said. “At some point a carbon tax or ETS is inevitable and would need to be priced in.”

Buckley said if that happened, the CEFC could well be stranded with any loan it’s given to coal power stations.https://www.theguardian.com/environment/2017/feb/02/how-malcolm-turnbull-could-ignore-the-facts-and-fund-the-myth-of-clean-coal

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February 3, 2017 - Posted by | AUSTRALIA - NATIONAL, business, politics

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