Proposition

New South Wales faces a power shortage. This could be fixed by increasing interconnection with Queensland. At the same time as it secured New South Wales’ supply it should decrease the cost of electricity in Queensland.

Background

• AGL is proposing to close its Liddell power station, and Energy Australia’s Mt Piper may be forced to close because of a court action brought by activists limiting their access to coal. Combined this will remove 3400 MW of power generation leaving a shortfall of around 3400 to 900 between now and 2022.
• Queensland has a power generation surplus of 500 to 2500 MW so could meet a significant portion of that deficit.
• Renewables cannot fill the gap, and a new coal-fired generator could take 7 years to build. Gas-fired generation could be built faster, but would be two to three times more expensive.
• Currently the interconnector between Queensland and New South Wales has maximum transfer capacity of 1200 MW.
• Duplicating the interconnector could cost in the order of $1Bn. A 1200 MW power station would cost around $2.5Bn. Duplication is worth investigating as a potentially cheaper option for New South Wales than a new power station.
• The Queensland government owns most of the power generation needed and operating it at higher capacity would allow it to lower prices for Queenslanders while more than compensating it with earnings from New South Wales consumers.
• The interconnector is owned and operated by Transgrid (NSW) and Powerlink (Qld). The Queensland and New South Wales governments should urgently engage with the owners to explore the feasibility of duplicating the interconnector as soon as possible.
• Duplication of the interconnector would enhance the feasibility of a new Queensland HELE coal-fired power generator, with 50% lower CO2 emissions than a conventional generator.

Comment

“The Queensland and NSW governments should adopt an adult approach to power generation which utilises our existing national generating capacity more efficiently, and accepts thermal power stations as an integral part of the mix.

“Prematurely forcing intermittent renewable power into the network, combined with mindless anti-coal activism, is destroying Australia’s capacity to run a modern economy. This is putting people’s lives and livelihoods at risk.”

Graham Young, Executive Director, Australian Institute for Progress. 0411 104 801