Federal government slammed after announcement of gas power station

The federal government has been slammed for a decision that critics say will push up electricity prices and is an “appalling decision”.

The federal government has been slammed for a decision that critics say will push up electricity prices and is an “appalling decision”.

The stoush surrounds the government’s decision to fund a new 660-megawatt gas power station in the New South Wales Hunter Region and industry groups are furious at the government’s “intervention” in the electricity market.

The announcement by Federal Energy Minister Angus Taylor on Wednesday will see the tax-payer-funded $600m gas power plant at Kurri Kurri to “secure Australia’s energy supply”.

The plan is in partnership with the government-owned Snowy Hydro.

Mr Taylor said the decision will “keep prices low” and create a further 1800 jobs in the Hunter Region but the Australian Climate Council described the decision as a “waste of taxpayer money that will push up electricity prices and worsen climate change”.

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The Morrison Government & @snowyhydro will build a gas power plant at Kurri Kurri to secure Australia's energy supply, keep prices low & create 1800 jobs in the Hunter Valley region. Today's announcement is a big win for workers, households & our manufacturing sector #auspolpic.twitter.com/BLrn4Al0UF

— Angus Taylor MP (@AngusTaylorMP) May 19, 2021

Adding fuel to the fire for critics is on the same day as the government’s announcement, a report by the world’s leading energy agency urged Australia to abandon plan for coal, power, gas and oil investments.

The The International Energy Agency said it was the only way the country would achieve net- zero emissions by 2050.

Critics say the decision makes “no commercial sense” and won’t deliver on lowering household electricity bills.

“Building a new gas power station in NSW will raise electricity prices for residents and businesses, not lower them,” Andrew Stock, Climate Council spokesperson and senior energy executive said.

“Gas is expensive and gas peakers that rarely run need to drive up prices to get a return. “Federal interference in the electricity market also discourages private sector investment.”

Mr Taylor insisted the power plant will “maintain pressure on power prices”.

When quizzed by Peta Credlin on Sky News on Wednesday night, he said gas is “flexible, dispatchable, can bring prices down and can keep the lights on”.

“We’ve got to get new capacity into the market; preferably flexible capacity, so something that can be turned on and off quickly, and that’s why gas generation is so attractive under these circumstances,” he said.

“Energy Australia has invested in a 300-megawatt generator in the Illawarra … so the two combined can ensure we’ve covered the market for the closure of Liddell but there will need to be more capacity coming in the lead up to 2030.”

Hunter Valley Labor MPs Joel Fitzgibbon and Meryl Swanson have backed also the Morrison government’s plan, according to The Australian.

Ms Swanson, who represents the region where the plant will be built, said the community supported the project and urged the government to “get on and build it as quickly as they can”.

“No one knows what is going on in my area as well as I do. And I know what people are saying to me locally,” Ms Swanson told The Australian.

Labor's carbon tax killed the aluminum smelter at Kurri Kurri, costing hundreds of local workers their jobs. We are bringing the site back to life with a new #gas power plant to keep energy prices low & create 1800 jobs. Labor destroys jobs, we create them #auspol

— Angus Taylor MP (@AngusTaylorMP) May 19, 2021

Climate Council spokesperson Nicki Hutley said gas is “drives up electricity prices” and urged the government to consider renewable energy technologies.

The Australian Energy Council, which represents suppliers like AGL, EnergyAustralia and Origin said more investment is being driven by government rather than the private sector.

It also said it’s also unclear why the government has a target of an additional 1000 megawatts of power by April 30 when expert analysis “does not support it”,

It’s chief executive Sarah McNamara told The Age gas-fired energy had a role to play as the country moves towards net-zero emissions but noted the importance of “market dynamics and independent expert assessments”.

#MediaRelease: The decision by the Federal Government to build a new gas-fired power station in New South Wales is reckless and undermines Australia's efforts to deliver lower-cost power, reduce emissions and build a reliable energy system.https://t.co/liMcWWWHaE

— Clean Energy Council (@cleannrgcouncil) May 19, 2021

Greg Bourne, Climate Council spokesman and former President, BP Australasia said the announcement “is bad energy policy, and bad economic policy from the Federal Government.

“The International Energy Agency has just said there can be no new coal, oil, and gas expansion if the world is to get to net zero by 2050, and the Australian Energy Market Operator and Energy Security Board have already indicated that New South Wales does not need new gas projects to meet its future energy needs,” he said.

“The state government’s proposed Renewable Energy Zones (REZs) and AGL’s plans for renewable energy and battery projects across NSW will supply clean, affordable electricity to the state and render a new gas power station unnecessary.

“As renewable energy and battery technologies become cheaper by the day, the Federal Government’s shortsighted investment in a new gas fired power station, built with taxpayer money, not only makes no sense from an energy or economic perspective, it will likely end up as a stranded asset.”

Originally published as Federal government slammed after announcement of gas power station