Summary

Australian power company Delta has revealed it has plans to build a new low-emissions coal-fired power plant. This is likely to be accommodated and supported under the federal government’s NEG.

Delta has not determined where its plant will be but cites the removal of Hazelwood, and the near retirement of Liddell, as creating a need for it.

Queensland should ensure it is in the running for the generator to be built here, at the same time as it should encourage Powerlink to increase the size of the Queensland New South Wales interconnector.

Analysis

Australia has an aging generator fleet and increasingly relies on renewables to fill existing and new power demand. This has contributed to an increase in power prices, and a decrease in reliability, which is resulting in businesses relocating operations to other countries.

This destroys Australian jobs, and has little, to negative, effects on carbon emissions.

Queensland has a surplus of dispatchable electricity generation capacity, and the newest generator fleet in the country. We could become the “flywheel” for the count, providing reliability and containing price.

We also need industry development, particularly in Central and North Queensland, and the potential to value-add to our minerals before they are exported.

Two steps are required.

We need to be better connected to the national market. Doubling the interconnector between Queensland and New South Wales would compensate for much of the loss of generation from Liddell.

We need additional generation to ensure that we continue to have a sufficient buffer, and can grow new industries. Collinsville would be a suitable site, and as the site of a former power station it would be cheap and easy to connect to the grid.

The AIP has produced work supporting both of these initiatives, and most recently at our McIlwraith Lecture, former Queensland Under Treasurer, Sir Leo Hielscher, called for a new coal-fired power generator in North Queensland.

New generation HELE coal-fired power stations emit 50% less CO2 than older generators, and the government’s Paris target for reducing CO2 emissions is 26% to 28%.

Quote

“This is a once-in-a-generation opportunity to grab more jobs for Queensland, get a better return for the state’s power generation assets, at the same time lowering prices by introducing generation competition, lowering emissions, and potentially creating new industries in a part of Queensland that needs as much help as it can get.” Graham Young Executive Director