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Clouds darken over the future of trouble-plagued coal-fired power station

The future of Australia’s first supercritical coal-fired power station is in doubt, one month after its private part-owner fell into voluntary administration.

Callide Power Stations B and C in central Queensland.
Callide Power Stations B and C in central Queensland.

The future of Australia’s first supercritical coal-fired power station is in doubt, one month after its private part-owner fell into voluntary administration.

Trouble-prone Callide C power station, commissioned in 2001 near Biloela in central Queensland, has a capacity of 800MW, about 10 per cent of the state’s coal-fired power generation and 5 per cent of the state’s total installed electricity generation capacity in Queensland.

The plant is owned in a 50-50 joint venture by the state government’s CS Energy and IG Energy Holdings, which was placed into voluntary administration with Deloitte last month.

Administrator Richard Hughes told The Australian the matter was complex, and Deloitte would apply to the Federal Court on Friday to have administration extended. Mr Hughes said administrators were “still contemplating” whether to offload IG Energy’s 50 per cent share in Callide C, and were in continuing discussions with CS Energy.

“We don’t have a way forward yet,” he said.

Callide C has been entirely off line since late October, when a cooling tower collapsed in the C3 unit. An explosion at the C4 unit shut it down in May 2021, and the return-to-service date for both keeps getting pushed back.

C3 is expected to be fully operational again in December, and C4 by January, but a CS Energy spokeswoman said the rebuilding of the cooling towers was “highly complex”. An industry source said the projected cost for rebuilding the towers was $100m, and predicted further delays.

CS Energy and its shareholding ministers, Energy Minister Mick de Brenni and Treasurer Cameron Dick, did not answer questions about whether the government-owned corporation would buy out IG Energy’s 50 per cent stake in Callide C.

The CS Energy spokeswoman said: “CS Energy remains committed to the safe and timely reinstatement of the Callide C Power station units 3 and 4, and we continue to work through our options with the administrators of (IG Energy subsidiary) Genuity to achieve this.”

Opposition MP Pat Weir said it “beggared belief” that one month after the failure of a major government asset, there was still “deathly silence” from the government about its future.

CFMEU mining and energy division district vice-president Shane Brunker said he was concerned the government would retire Callide early, as part of its policy to hit 70 per cent renewable energy by 2032 and phase out coal-fired power by 2035.

“(Deputy Premier Steven) Miles and de Brenni would love to hang a coal-fired power station closure up in the halls of (government offices at) 1 William Street,” Mr Brunker said of the Left faction cabinet ministers. “We’ve got grave concerns about the future of the Callide units.”

The renewable energy target is 80 per cent by 2035.

Queensland Conservation Council energy strategist Clare Silcock said the state government should buy out the private stake in Callide C. “There’s not a closure date for Callide C (as part of the renewable energy plan) because the government haven’t been able to sort out with (the private joint venture partner) when that should be,” Ms Silcock said.

Sarah Elks
Sarah ElksSenior Reporter

Sarah Elks is a senior reporter for The Australian in its Brisbane bureau, focusing on investigations into politics, business and industry. Sarah has worked for the paper for 15 years, primarily in Brisbane, but also in Sydney, and in Cairns as north Queensland correspondent. She has covered election campaigns, high-profile murder trials, and natural disasters, and was named Queensland Journalist of the Year in 2016 for a series of exclusive stories exposing the failure of Clive Palmer’s Queensland Nickel business. Sarah has been nominated for four Walkley awards. Got a tip? elkss@theaustralian.com.au; GPO Box 2145 Brisbane QLD 4001

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Original URL: https://www.theaustralian.com.au/business/markets/clouds-darken-over-the-future-of-troubleplagued-coalfired-power-station/news-story/7864616327d2d7a8769b2309122f2379