Coal Could Get Clean-Energy Subsidy Under New Turnbull Focus

Fairfax - Mark Kenny

Malcolm Turnbull has opened the possibility of using clean-energy subsidies to build new-generation, coal-fired power stations as he branded Labor's heavy focus on renewables "mindless", and a recipe for more expensive, less reliable electricity.
Flagging a policy switch sure to provoke anger from anti-coal environmentalists, but set to please fossil-fuel enthusiasts in the Coalition partyroom, Mr Turnbull said technological advances had made new coal-fired generators viable as a potential foundation in the overall energy mix.

'Clean coal' makes a comeback
New technology means coal will play a role in electricity generation long into the future, says Malcolm Turnbull. Courtesy ABC News 24.

"The next incarnation of our national energy policy should be technology agnostic - it's security and cost that matter most, not how you deliver it," he told the National Press Club in Canberra.
This called for a policy approach that was non-ideological, using "all of the above technologies" - coal, wind, solar, pumped hydro, and improved battery storage.

Malcolm Turnbull has flagged a policy switch that is sure to provoke anger from anti-coal environmentalists. Photo: Brendan Esposito

"Storage (battery) has a big role to play, that's true, but we will need more synchronous baseload power and, as the world's largest coal exporter, we have a vested interest in showing that we can provide both lower emissions and reliable baseload power with state-of-the-art, clean-coal-fired technology," he said.
And in a clear sign that the politics of the change will be packaged in retail terms - ie, what it would mean for ordinary consumers and businesses - he declared: "The battlelines have been drawn - it is clear that the Coalition stands for cheaper energy."
The comments came in a scene-setting speech in which the Prime Minister drew his battlelines of 2017 as the push for lower business taxes, cheaper and more reliable energy, and more affordable childcare funded through the abolition of Family Tax Benefit subsidies.
While he did not repeat Tony Abbott's moral declaration that coal is "good for humanity", he arrived at a similar position from a practical standpoint, observing that Australia was not playing to its natural advantages of plentiful gas, and abundant coal.
"Australia is the world's largest exporter of coal, has invested $590 million since 2009 in clean-coal technology research and demonstration, and yet we do not have one modern High Efficiency Low Emissions (HELE), coal-fired power station, let alone one with CCS (carbon capture and storage)"," he said.
"Increasing gas supply in Australia is vital for our energy future and vital for industries and jobs, but state bans on onshore gas development will result in more expensive and less reliable energy."
The option of redirecting federal subsidies from exclusively renewable energy projects to encourage investment in new, coal-fired power generators, is among "several ideas" being considered as part of a wide review of policy.
A number of countries, including Japan, currently use either supercritical (SC) and ultra-supercritical (USC) coal-fired generators, which work with black coal and higher temperatures to produce more energy per tonne but with lower emissions than their predecessors.
Under pressures from both political flanks, Mr Turnbull used the speech, his first set-piece political address for the year, to propose a new approach to climate and energy policy in which the metrics are energy affordability, energy security, and the lowest achievable emissions.
Senior ministers are now actively discussing a plan in conjunction with Chief Scientist Dr Alan Finkel, who is undertaking a review of energy markets.
"He and others and a group of cabinet ministers are working with the Prime Minister now on a set of proposals, to provide, if you like, a more systemic approach to all of this," revealed Industry Minister Arthur Sinodinos, speaking on Sky News.
The policy shift puts the government on a collision course with the opposition and the environmental lobby over climate policy, reviving the carbon tax wars of recent years.
Mr Turnbull also used the podium to slam the Labor states for pursuing unrealistic renewable energy targets while opposing onshore gas exploration, sayingf: "Nothing will more rapidly de-industrialise Australia and deter investment more than more and more expensive, let alone less reliable, energy."
He offered to lead new Commonwealth/state discussions in a bid to see those moratoriums lifted.
Mr Turnbull's speech followed just one day after that of the Opposition Leader Bill Shorten, who used his Press Club opportunity to defend Labor's ambitious 2030 target for Australian renewable energy consumption of 50 per cent.
He said the 50 per cent target would generate new jobs for scientists, technicians, and blue-collar workers alike.
The government argues the costs to the economy would be prohibitive, leaving consumers out of pocket, while driving up business costs and risking investment and jobs.
An independent assessment by the Australian Energy Market Regulator put the potential cost of the 50 per cent RET at some $48 billion.
In his speech, Mr Turnbull revealed he had asked the Australian Renewable Energy Agency and the Clean Energy Finance Corporation to work together "on a new funding round for large-scale storage and other flexible capacity projects, including pumped hydro".
If it occurs, the role-change of using the CEFC to subsidise new private investment in coal-fired power, would be a startling variation from the policy pursued by Tony Abbott, who tried unsuccessfully to scrap what he had dubbed as "Bob Brown's bank".

Links

• Coalition's renewable energy target won't last forever, says Turnbull
• Malcolm Turnbull says coal, CSG and renewables vital for energy future
• Barnaby Joyce backs Government funding coal-power stations following Malcolm Turnbull's Press Club address
• Turnbull's coal embrace will leave critics cold