Adani coal mine just does not make economic sense
Coal glut, cheaper renewables, Adani makes no sense at all, MichaelWest.com.au April 19, 2017 As public angst over the prospective A$1 billion subsidy to coal magnate Guatam Adani hits fever pitch, a small company is modestly beavering away on another – more worthy – energy project in Far North Queensland.
Genex Power has turned the abandoned Kidston gold mine into a solar farm and pumped-hydro power storage project. Kidston will deliver 145MWh of renewable energy per year. This is enough to power 26,484 homes. In terms of reducing emissions, this is equivalent to taking 33,000 cars off Australian roads.
Like Adani, the Kidston project also got a leg-up from government. It won a grant of nearly A$9 million from ARENA, the Australian Renewable Energy Agency, and struck a deal with the state of Queensland to sell electricity for 20 years.
Unlike Adani’s Carmichael coal mine, however, the Kidston solar project has bankers and investors. Unlike Adani, whose labyrinthine corporate structure wends its way to the Cayman Islands, Genex is listed on the Australian Stock Exchange, has a market value of A$70 million and is owned by small investors. When it delivers its first power in the next three months, it’s likely to pay tax on its profits.
The furore over Adani has so far centred on the putative subsidy for the rail line to cart the coal from the Galilee Basin to the coast. There is no rail line without a mine, however, and so the bigger question is: who is going to tip in the A$10 billion in project finance to build the mine?
Adani’s bankers have long fled the scene – not just for environmental reasons, but because the business case for building this, the world’s biggest new thermal coal mine, is sketchy.
The global seaborne coal market is in structural decline. There is a glut. Thermal coal futures prices are well below the spot price – and even at present spot prices, this is hardly a viable financial proposition…….http://www.michaelwest.com.au/coal-glut-cheaper-renewables-adani-makes-no-sense-at-all/
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