Minerals Council backs Latrobe coal-fired power station

The Minerals Council of Australia has backed the construction of a brown coal-fired power plant in the Latrobe Valley.

The Hazelwood power station near Morwell in Victoria’s Latrobe Valley closed in March.

The Minerals Council of Australia has backed the construction of a new brown coal-fired power plant in Victoria’s Latrobe Valley using the latest technology that it says is capable of driving emissions down by up to 40 per cent.

In a policy paper issued yesterday that talks up the potential of the nation’s highest-emitting coal resources, the MCA warns of a looming gap in baseload power following this year’s closure of ­Hazelwood and the expected retirement of another 8000MW of baseload power before 2030.

It urges the federal government not to penalise the latest brown coal power stations in its response to the Finkel review and its recommendation of adopting a clean energy target.

“There is a need to start building new baseload power stations,” the report on “a low emissions coal future for the Latrobe Valley,” sthe paper said. “Given the current gas market challenges in eastern Australia, the Latrobe Valley offers a good option. Not only is the fuel source — brown coal — readily available, there is an existing and under-­utilised power network system in place.”

The report comes after the ­Hazelwood power station in the Valley closed in March after a short notice period, putting 750 people out of work.

It also comes as debate centres on how to orderly close the rest of the state’s brown coal plants, which all other things being equal emit more carbon than their black coal counterparts in NSW and Queensland.

The MCA report says the latest brown coal technology in use in Germany, at the Neurath F&G ultra super critical plant, can produce power at emissions 25 per cent below the current power stations in the Latrobe Valley. And the latest power station proposed by Germany’s RWE, known as BOA Plus and combined with coal bed drying, has 35-40 per cent lower emissions, the MCA says.

The current German plant, has emissions of about 0.9kg per kWh, while the proposed one, which is going through its approval process, emits at 0.75kg per kWh.

The MCA says the BOA Plus plant would have 55 per cent lower emissions than Hazelwood, which was the oldest and most inefficient plant in the Valley.

“With a levelised cost of energy of around $55-$65 per MWh, a similar power station (to BOA) ­located in the Latrobe Valley would offer the lowest cost new baseload power, significantly cheaper than gas or renewables and storage,” the MCA said.

“It would help place downward pressure on electricity prices, ensure reliability while also reducing emissions from the power sector.”

To finance a new plant in an environment that lacked certainty even if the plant was economic, the MCA urged the government to consider making available Clean Energy Finance Corp funding for “high energy, low emissions” plants, like the ones built in Germany. “A Clean Energy Target may provide a mechanism to drive investment, however ... the design and implementation details will be critical,” the MCA said, adding that a CET could still be ­altered by future governments.

“At the least, a CET must not exclude investment in low-cost, low-emission and highly reliable power sources like the latest brown coal technologies,” the MCA said.

The paper, which has been done in conjunction with the Com­mittee for Gippsland. The MCA called on both the Victorian and federal governments to urgently investigate building a new power station in the Latrobe Valley.