Nationals arc up over future of coal

Scott Morrison’s national gas plan and push to fast-track a new gas-fired power station in the NSW Hunter Valley has sparked unrest among Nationals MPs.

Scott Morrison visits the Tomago aluminium smelter on Tuesday. Picture: Adam Taylor / PMO

Scott Morrison’s national gas plan and push to fast-track a new gas-fired power station in the NSW Hunter Valley has sparked unrest among Nationals MPs, who are demanding coal not be dropped from the government’s long-term energy blueprint.

The Prime Minister said on Tuesday that coal would remain a critical energy source for decades to come but stressed the urgency of bringing on 1000MW of dis­patchable power to replace the Liddell coal power plant by the summer of 2023-24.

The Australian understands the government backs a proposed Snowy Hydro gas-fired “peaker’’ plant — to run only when there is peak demand — because it could be put in place in 18-24 months compared with a coal-fired power station, which would likely face lengthy approvals delays.

“We have to be practical,’’ Mr Morrison said. “When we deliver this dispatchable energy to support the grid, it’s got to be things that actually turn up. I’m not interested in having a 10-year debate with people about getting an approval­ for a project that may never happen.

“I want to focus on something that will happen. And we know that we can get something up here in Newcastle with a gas-fired plant. And we know we can get support for that. We know we can make that happen. So we have to dwell in the realm of reality.”

Former resources minister Matt Canavan said the Nationals had formed a Coalition with Mr Morrison on the “basis that coal would be treated the same as all other energy sources”.

“It doesn’t make a lot of sense to me to build a gas-fired power plant in a state that imports more than 90 per cent of its gas and in the middle of the world’s greatest thermal­ coal basin,” Senator Canavan told The Australian.

The central Queensland senat­or, who led the successful Coali­tion marginal seat campaign credited with Labor’s dismal election result in Queensland, said in addition to carbon capture and storage he wanted the government to back high-efficiency, low-emission coal plants.

Energy Minister Angus Taylor is preparing to release the government’s technology investment roadmap before the October 6 budget, prioritising energy tech­nol­ogies for governments and the private sector and setting up the nation’s long-term emissions strategy.

Resources Minister Keith Pitt said if CCS technology were effect­ive and commercially viable, there would be “more coal-fired power stations”. The central Queensland MP said HELE coal-fired power stations combined with CCS would cut emissions by 90 per cent. “It’s reliable, it’s available, and that’s what we’re looking for,” Mr Pitt said.

The architect of the Federal government’s gas plan, former Dow Chemical chief Andrew Liveris, has said gas was integral to ensuring a low or no emission future and to allow Australia to meet its Paris targets.

“We do have to have a future of net-zero and a future that minimises carbon. We need a transition in an affordable way,” he said. “You can’t get 100% of renewables at a reliable price.”

Mr Liveris, speaking on Radio National on Wednesday, said Australia had significant amounts of gas it wasn’t bringing to market and switching over to gas from coal could see emissions intensity cut by 40 per cent.

“Our consumers are paying higher prices than they are in Tokyo, that’s a travesty,” he said.

“The transition pathway has to be technology and fact-based not emotion-based, we’ve got to tip the carbon out of the air you’ve got to get it out of the smokestacks.”

He said criticism of the government’s plan as interventionist misunderstood the role of the state in creating markets. “Governments function when they create frameworks and rules to allow markets to function, You don’t have a travel business without airports,” he said.

“You’ve got to create the framework to create the mechanism for markets to form, we have failed to create that mechanism until yesterday.”

Mr Liveris will speak further on the plan at the National Press Club on Wednesday.

Atlassian co-CEO and co-founder Mike Cannon-Brookes says Mr Morrison’s gas plan would only go to further distorting the energy market and goes against expert advice.

He said the suggestion the government would finance gas and energy projects if the market failed to act would only reinforce inaction. “Most people who were going to do something are going to sit aside saying I’m going to wait for the government,” Mr Cannon-Brookes said.

“If you want to create market confusion that’s the best way to do it.

“This intervention will drive up energy prices for consumers. It will lock in that gas plant for another 40 years. This is not the cheapest long term plan for our grid at all.”

Mr Cannon-Brookes’ remarks come after he yesterday said he would consider developing an option to replace the aging Liddel coal-fired power station in NSW.

The software billionaire has already worked on several energy projects including a major battery storage plant in South Australia.

“Parts of this bundle are good, the extra transmission will bring on far more renewables to our grid in a stable and sensitive way,” he said. “We need to be clear about what we are trying to solve, I don’t think the solution is gas. The chief scientist has been very clear we need to keep the existing gas generation we have running for their lives. He is absolutely against any new gas extraction as being incompatible with our Paris emission goals.”

In a major pre-budget speech delivered in Newcastle on ­Tuesday, Mr Morrison said “you ­cannot talk about electricity gener­ation and ignore coal”.

“For decades, coal-fired generation has been a source of competitive strength for our economy. Reliable, low-cost energy. This is still true.

“Coal will continue to play an important role in our economy for decades to come. With new technologies such as carbon capture and storage continuing to improve, it will have an even longer life, not just here in Australia, but in our export markets as well … that means jobs.”

His gas plan also highlighted divisions inside the ALP, with opposition climate change spokesman Mark Butler, who has clashed with Joel Fitzgibbon over Labor’s approach to a gas-led COVID-19 recovery, describing the government’s plan as “heavy on spin”.

Mr Fitzgibbon, Labor’s resources spokesman, claimed the government’s decision to build a gas power plant in the Hunter as his plan and backed the underwriting of long-term gas supply contracts, allowing money to be raised on the markets to “bring certainty”.

With David Ross