Clinging to coal could cost taxpayers millions more in power bills

The state government has promised to axe Labor’s renewables targets and extend the life of ageing coal-fired power stations, which critics argue could eventually increase electricity costs.

A general view of the Callide Power Station.

Keeping coal-fired power stations open past their usable life will make the grid more unreliable and eventually send household bills higher, energy experts say.

The state government has promised to axe Labor’s renewables targets and extend the life of ageing coal-fired power stations, which critics argue could cost taxpayers almost half-a-billion dollars each year.

The government’s announcement came amid revelations of a second major incident at the trouble-plagued Callide power station.

Callide’s C3 unit was badly damaged on Friday by a “pressure spike” and it could be offline until at least the end of May.

Scheduled maintenance on the station’s other generators – B1 and B2 – during May and June could also put pressure on the supply of energy to Queenslanders.

A CS Energy spokeswoman said a clinker – hardened ash – detached from the internal boiler wall of Unit C3.

Practices are in place to regularly detach clinkers from furnace tubes, when they fall to the bottom of the boiler and can be removed.

“On this occasion, when the clinker detached, it resulted in a pressure spike within the furnace,” she said.

“Our initial assessment is that repairs are required to cladding and lagging on the upper section of the boiler.”

CS Energy’s Callide B power station was set to be retired in 2028, but Treasurer David Janetzki said it would be kept open while viable as he declined to put a date on its closure.

Grattan Institute Energy Program Director Tony Wood questioned the effectiveness of the policy.

Keeping coal fired power stations could cost taxpayers more in power bills.

“These plants are getting older and even though the Queensland ones are younger than other states, they are getting older,” he said.

“You can extend their life but there are consequences … eventually it does have an impact on prices.

“They become more expensive, they tend to break down more often.”

Mr Wood said keeping coal stations running could also affect the stability of the electricity grid, with breakdowns more keenly felt.

“The impact of one of them not being available for a while is more significant,” he said.

Mr Wood blamed the reignited debate about energy and emissions to the difficulty in transitioning to renewable energy and a focus on rising cost of living.

“High prices aren’t necessarily caused by renewables but often things governments can’t control like a physical power station failure or the war in Ukraine.”

Mr Janetzki, asked if bills would be higher, said the government would deliver “affordable, reliable, and sustainable electricity”.

He said Treasury would work with government-owned corporations to determine the technical and commercial life spans of coal generators.

“They will remain open for as long as it is economically sensible and systemically needed not an arbitrary date to fill a headline in a magazine,” he said.

“As important as coal generated capacity is to our state, and to the stability of the national electricity market, we will also need to prepare for the gradual closure of those power stations in the future.”

The government also announced it will spend $50m to transition a former gold mine west of Bundaberg into a pumped hydro project, possibly making it among the first mines in the country to be converted into energy generation.

Federal Energy Minister Chris Bowen said Queensland’s decision was unsurprising and noted coal was “the most unreliable form of energy”.

“As well as being high, very high emissions … we’ve not got a day in the last two years where we haven’t seen a breakdown in a coal fired power station for our energy,” he said.

“That is why we are proceeding the massive roll out of renewable energy and dispatchable energy supported by storage to ensure that states can make the decisions that they want to make to move, when appropriate, away from coal fired power stations and close them in part of an orderly managed transition.”

Mr Janetzki’s announcements were met with criticism from the Queensland Conservation Council, which said keeping the Callide B coal power station open could cost Queensland taxpayers up to $420m a year.

Queensland Conservation Council Director Dave Copeman said the government was elected on a promise to reduce emissions by 75 per cent by 2035.

“Now they are playing dangerous politics with our energy system as well as breaking their promise on real climate action,” he said.

“Callide B was designed with a life span of 40 years and it’s set to retire in 2028.

“Keeping it open beyond then could cost Queenslanders up to $420m per year and expose us to higher risks of outages and pollution.”