Australia says clean energy fund could underwrite new coal plants

Minister Josh Frydenberg and a helmeted honeyeater. Photo from Offical Australian Government Website

Posted by Joseph R Fonseca

Australia is considering altering legislation to
enable funds slated for clean energy developments to be used to
bankroll construction of new low emission, coal-fired power
plants.

The suggestion by Energy Minister Josh Frydenberg comes after a
major power outage during a heat wave in South Australia state
worsened a row with the national government over energy security
and the state's heavy reliance on wind and solar power.

Frydenberg said current laws governing the Clean Energy Finance
Corporation (CEFC) prevented it from investing in the
high-energy, low emission (HELE) coal plants.

"In the Act it explicitly rejects carbon capture and storage and
nuclear power," Frydenberg told the Australian Broadcasting Corp
television on Sunday.

"It actually confines investments to ones which reduce emissions
by more than 50 percent on what the average is across the
national electricity market," he said.

"So right now a HELE plant - one of these high efficiency low
emission power plants - could not be funded under the Clean
Energy Finance Corporation."

Asked if the government wanted to see the 50 percent restriction
relaxed, Frydenberg said: "That is certainly one of the options
that we're looking at..."

The government suggestion to tap taxpayer funds to build the HELE
plants also comes after industry participants indicated the
private sector was not interested in investing in the plants.

Frydenberg said that while the cost of renewable energy had
fallen substantially, it did not solve the problem of integrating
intermittent energy supplies into a grid designed to transmit
baseload sources of supply, mainly from coal.

"The real challenge for us now is how do we integrate this higher
uptake of wind and solar into a system which hasn't been
necessarily built for that, or had that situation in the past."

New South Wales state Premier Gladys Berejiklian said her state,
the country's most populous and one heavily reliant on coal-fired
power plants, was open to new coal-based sources of energy
supply.

"We need to ensure all states are doing what they can to secure
their energy resources," she told Sky News.

Australia is one of the largest carbon emitters on a per capita
basis due to its reliance on coal-fired power plants. Power
generators account for roughly one-third of Australia's carbon
emissions.

The national government wants 23.5 percent of Australia's energy
mix to come from renewables by 2020, but nearly all states have
set much more ambitious renewable goals to cut carbon dioxide
emissions from their electricity sector - clouding the outlook
for many generators.

(Reporting by Peter Gosnell)

Feb 19, 2017

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