Energy, economic experts slam $600m Kurri Kurri gas-fired power plant

Economic and energy experts say a new gas-fired power plant makes ‘no economic sense’, but the government insists it’s good for jobs.

Economic and energy experts alike have slammed the Morrison Government’s announcement of a new gas-fired power station in NSW, labelling it an “appalling” waste of taxpayer money that will drive up electricity prices and cause irreparable environmental damage.

The Climate Council of Australia said the $600m plant, to be built in Kurri Kurri in the Hunter Valley, didn’t make “economic sense”, arguing investment in renewable sources would be better suited.

But, the Federal Government says not only will the new station create 600 jobs during construction, it would also help NSW residents and businesses avoid a potential 30 per cent power bill price hike.

The $600m gas-powered electricity plant in Kurri Kurri will replace Liddell, which is due to close in 2023. Picture: AAP Image/Dan Himbrechts

The Federal Government committed the money for the new gas-powered plant in the 2020-21 budget, and Snowy Hydro Limited will be tasked with constructing the plant, set to create up to 600 jobs during peak construction and supporting up to 1200 jobs across NSW in the longer term.

After economic modelling suggested power prices could rise by up to 30 per cent after the Liddell station closed down, Energy Minister Angus Taylor insisted the plant would secure affordable energy for NSW.

“This project will deliver flexible gas generation to replace Liddell and maintain reliable power alongside Australia’s world-leading investment in renewables,” he said.

“Cheap power is crucial to ensuring families, businesses and job-creating industries in NSW can thrive.”

But Andrew Stock, a senior energy executive with over 40 years experience, said the construction of a new gas power station would not lower electricity prices for homes and businesses as promised by the government. He claimed it would only raise them.

“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,” he said.

“Any potential shortfall created by the closure of Liddell Power Station (in 2023) would have been filled by the NSW state government and energy industry’s announced plans to build renewable energy zones and big batteries across the state.

“Renewables are the cheaper, smarter choice to meet future energy demand compared to gas, which is expensive, polluting and worsens climate change. This decision is an all-round poor move for Australian taxpayers.”

But Scott Morrison’s announcement has been slammed as not making ‘economic sense’. Picture: Adam Taylor

The announcement came as the International Energy Agency released a road map towards achieving global net zero emissions by 2050, highlighting a need to stop investment in new coalmines, oil and gas wells.

Economist Nicki Hutley said gas no longer made economic sense in Australia.

“It drives up electricity prices, it increases emissions at a time when the rest of the world is reducing emissions, and it creates very few jobs,” she said.

“The majority of benefit from this move will be concentrated in the hands of large gas corporations at the expense of lives and livelihoods.

“The government should invest in renewable energy technology.”

In September, Prime Minister Scott Morrison gave the private sector an ultimatum to either progress plans to replace Liddell, or the government would.

The Kurri Kurri project will work alongside Energy Australia’s proposed 316MW gas plant near Wollongong to meet the government’s target of 1000MW of detachable power.

Mr Morrison said the government had stepped up to protect Australia.