Tony Abbott backs replacing ageing coal power plants
Tony Abbott has backed the immediate replacement of ageing coal fired power plants and taken a swipe at Scott Morrison.
Tony Abbott has backed the immediate replacement of ageing coal fired power plants with new ones and taken a swipe at Scott Morrison after the Treasurer slapped down the demands of a new pro-coal group within the Coalition.
Responding to Mr Morrison’s attack on the “Monash Forum” — a group of MPs agitating for Malcolm Turnbull to provide up to $4bn in finance for a new “Hazelwood 2.0” coal fired power station in Victoria — Mr Abbott suggested the Treasurer was being inconsistent.
“Scott Morrison himself came into Question Time one day a few months ago and waved around a big lump of coal,” Mr Abbott told 2GB. “He said to the Labor Party: ‘This is coal. This is a good thing. Don’t have coal phobia’”.
“And I thought he was making a lot more sense that day than he was day”.
While Mr Abbott acknowledged Mr Morrison’s criticism that new coal fired power stations were more expensive to buy power from than older plants, he argued they were still cheaper than wind or solar plants.
“It’s true that new coal stations are more expensive to buy power from than old coal stations because the old coal stations have been depreciated,” he said. “But even new coal is still quite a bit cheaper than new gas and it’s much cheaper and much more reliable than wind and solar because it’s available all the time”.
“If we want to continue to enjoy the most affordable and reliable baseload power we’ve got to keep our existing coal fired power plants going ... And we are going to have to replace them sooner or later, and there’s no better time to start than now”.
The former prime minister said that he would likely be cycling through the Latrobe Valley — home to the now closed Hazelwood plant — following next week’s expected 30th Newspoll defeat for Mr Turnbull.
“I suspect that I will be in the Latrobe Valley which over the years has been a wonderful source of cheap reliable power,” he said.
Treasurer’s reality check on clean coal
Scott Morrison says the days of cheap coal-fired power are over, warning electricity from new High Efficiency Low Emissions coal plants costs twice as much as power from generators built in past.
In a reality check to Coalition backbenchers who want the government to pay for a $4 billion HELE coal plant, the Treasurer said “there is a difference between old coal and new coal”.
“Old coal bids into the energy grid at around about $30 per megawatt hour wholesale up to $40,” Mr Morrison told the AFR’s Banking and Wealth Summit.
“A new HELE plant, five, six or seven years down the track, it is estimated it would be bidding at around $70 or $80.
“So it is false to think that a new coal fired power station will generate electricity at the same price as old coal fired power stations for the obvious reason that the asset has already been written off.
“So you don’t just open up one down the road and all of a sudden it is producing power at the same price as Bayswater or any of the others. That is just not an economic fact.”
At least 20 Coalition backbenchers have signed up to a new policy ginger group, dubbed the Monash Forum, which is lobbying the party leaders for public investment in a “Hazelwood 2.0” coal-fired power station.
But the Treasurer said the government would not subsidise new coal plants, or any other power source.
“The days of subsidies in energy are over, whether it is for coal, wind, solar, any of them,” he said.
“That is the way I think you get the best functioning energy market with the lowest possible price for businesses and for households and that is what the National Energy Guarantee and our energy policies are designed to achieve.”
NSW Liberal MP Craig Kelly — the chief advocate for the new pro-coal faction within the Coalition — disputed Mr Morrison’s figures on the cost of new coal-fired power.
He said a 2400 megawatt coal fired power station under construction in Dubai had entered into contracts to deliver power at about $U42 a megawatt hour.
“That’s the equivalent of $55 Australian dollars a megawatt hour. We have no idea what the context of (the Treasurer’s) figures is,” he told Sky News.
“Now remember over in Dubai they don’t have coal, so they actually pay a premium to ship coal into Dubai to burn it to create electricity. And they can do it — it is the equivalent of $55 Australian dollars per megawatt hour”.
Mr Morrison welcomed Alinta’s proposal to buy the NSW’s Liddell power station from AGL, which plans to decommission the plant in 2022.
He said the government expected AGL not to misuse its market position to prevent “what is potentially a very good arrangement” to extend Liddell’s life by another five to seven years.
