Delta Electricity NSW Hunter Valley coal plant upgrade dumped

Plan to refurbish NSW coal-fired power station abandoned because of Berejiklian government energy road map reforms.

Delta Electricity chairman Trevor St Baker. Picture: Glenn Hunt / The Australian

Delta Electricity has dumped plans to refurbish a coal-fired power station in the NSW Hunter Valley because of “changes to electricity industry policy settings” under the Berejiklian government’s energy road map reforms.

In a media release drafted in December but not broadly released, Delta Electricity managing director Greg Everett said the company had backflipped on plans to submit a funding application for an upgrade to the Vales Point Power Station under the Morrison government’s Underwriting New Generation Investment (UNGI) program.

“Given the forward market outlook, the nominal closure of Vales Point in 2029 and proposed changes to electricity industry policy settings, the project is not economically viable without certainty around the UNGI funding,” Mr Everett said.

“Despite misinformation put forward by anti-coal groups, the upgrade to one of the Vales Point turbines had the potential to bring additional dispatchable generation into the grid while significantly reducing CO2 emissions.

“This project was about enhancing energy security while providing an overall reduction in carbon emissions.”

The Morrison Government committed $8.7 million in the 2020-21 budget through the UNGI program for Delta to upgrade a turban at the Lake Macquarie power station.

Delta Electricity chairman Trevor St Baker has been critical of the NSW government’s energy reforms, which is designed to incentivise the replacement of all coal-fired power plants with lower emission energy by 2042.

Energy Minister Angus Taylor said the decision by Delta was “disappointing”.

“Households and businesses in NSW can’t afford energy policies that put at risk investment in existing and new reliable generation needed to keep energy prices low and the grid secure,” Mr Taylor said.

“The Australian government has been stepping up, allocating funding for the Vales Point upgrade and progressing work on Snowy Hydro’s Kurri Kurri gas generation project.

“It is now important that good projects like Energy Australia’s and AGL’s gas projects are developed and supported in the new NSW policy.”

It is the fourth energy project that has been put on hold because of the NSW government’s policy.

Energy giant AGL last year deferred and reviewed plans for a ­Newcastle gas plant and a giant battery at Liddell.

EnergyAustralia also delayed a final investment decision on its planned $400m Tallawarra gas plant in NSW amid uncertainty over the threat of state and national government interventions in the energy sector.