The Turnbull government has opened talks with Asian investors to build a coal-fired power station backed by its $5 billion northern Australia fund, as half the nation’s voters endorse the use of taxpayer funds to develop the project and improve energy security.
Resources Minister Matt Canavan is fast-tracking the plan amid a growing fight with Labor and the Greens over support for coal power, as cabinet ministers prepare to decide how to encourage big investors into the market.
Senator Canavan told The Australian there was a “high degree of interest” from Asia helping to develop the new power station in northern Queensland, arguing that finance from the Northern Australia Infrastructure Fund would be needed to give the project long-term certainty.
A special Newspoll, conducted exclusively for The Australian, reveals that 47 per cent of voters favour the use of federal government funds to help construct a new coal-fired power station to improve energy security, while 40 per cent are opposed and 13 per cent undecided.
Amid a push by environmental groups to block new coalmines and coal-fired power stations, the national survey finds that 35 per cent of Labor voters and 15 per cent of Greens voters support using public funds to develop more coal-fired power.
It also shows that 59 per cent of Coalition voters favour public financial support for the new power station, lending weight to Malcolm Turnbull’s declaration that coal must be one of the options in a “technology neutral” approach to fixing energy security.
The findings come as the Prime Minister and Scott Morrison crack down on electricity retailers in a new move to act on fears about rising prices, ordering the Australian Competition & Consumer Commission to review the sector in order to get a better deal for consumers.
The Prime Minister and Treasurer will announce today that their response to the ACCC’s review will consider new measures to improve “reliability, security and pricing” across the sector.
As the imminent close of the ageing Hazelwood power station reignites debate about electricity shortages and price spikes, Labor climate change spokesman Mark Butler has declared there is no support from industry to build new coal-fired power stations in Australia.
The Australian Energy Council, which represents companies supplying electricity to 10 million homes, warns it has become “very difficult” to finance coal-fired power stations when investors are ramping up wind and solar projects as well as gas generators that provide baseload power with lower greenhouse gas emissions than coal.
But the government is determined to keep the coal proposal on the agenda by raising the prospect of funding from the northern Australia fund, which is also a potential source of support for the controversial coalmine planned for central Queensland by Indian company Adani.
Senator Canavan said there was “no doubt” of the rudimentary economic and commercial case for a coal-fired power station in northern Queensland but that the government’s challenge was to set the energy market rules to offer certainty.
“There’s clearly a risk of government policy changes in this area, and I think that’s a risk that’s been created by the Labor-Green(s) movement,” he said.
“Until last year there was bipartisan support for the future of coal in Australia but it was last year when Labor supported the Senate inquiry that said we should shut down all coal-fired power stations in Australia. That wasn’t the position of Kevin Rudd or Julia Gillard.
“The decision by Labor and the Greens to move to the radical fringes of our energy debate and turn their back completely on coal, on our second-biggest export, has introduced an element of risk to potential new coal-fired power stations.
“It’s now a sovereign risk and the only people who can get rid of sovereign risks are the sovereigns.”
A Senate inquiry led by a Labor and Greens majority last year argued for an “orderly retirement” of the nation’s coal-fired power stations but the government believes there is strong support in northern Queensland for a new coal project at a time of rising electricity prices.
Senator Canavan is examining options for a new power station near the Adani coalmine in the Galilee Basin, in Collinsville, to add to an existing power station or in Gladstone near an existing power station and taking advantage of transmission lines that are already in place.
The Resources Minister, who is also the Minister for Northern Australia and oversees the infrastructure fund, rejected suggestions that the help for a coal-fired power station would be a “subsidy” that meddled with the market.
“I wouldn’t characterise it as a subsidy, it’s an investment. Governments for decades have invested in energy infrastructure; all the energy infrastructure in Queensland is owned by the state government,’’ Senator Canavan said.
“It’s not unusual and generally those investments have paid off very well. I think most Australians see the central role of government as being investing in infrastructure — roads, rail and energy.”
Senator Canavan said the investment would be comparable to Mr Turnbull’s decision 10 days ago to offer government support for a $2bn expansion of the Snowy Mountains Hydro-Electric Scheme.
The energy security committee of cabinet is waiting on a report into the electricity market from Chief Scientist Alan Finkel before deciding any changes to the sector, with energy security expected to gain a priority so that baseload power generators — including coal-fired ones — are assured a long-term return.
Senator Canavan is talking to Japanese companies that believe they could transfer their “high efficiency, low emissions” technology to the northern Queensland project.
Mr Butler is warning against the use of taxpayer funds for the rail line to the Adani mine or a new power station, claiming the long-term future for coal is one of decline.
“This is something the coal industry needs to deal with. We’ve said as a federal Labor Party we will not support taxpayers’ money going in to support infrastructure or pay for infrastructure around this (Adani) mine,” he said last week.