The Turnbull Government is considering lifting a ban to allow the Clean Energy Finance Corporation to invest in carbon capture and storage.
Energy Minister Josh Frydenberg confirmed the government is considering issuing a ministerial directive to the Clean Energy Finance Corporation, which has been funding renewable energy projects around the country in past weeks, to invest in ‘clean coal’.
“It’s called the Clean Energy Finance Corporation not the renewable energy corporation,” he told the ABC.
The Turnbull Government has been promoting the use of clean coal-fired power stations in Australia to help secure the national energy grid, however, the energy industry has shown no interest in building new coal plants.
Current CEFC rules state it can only fund new generators that have half the emissions of existing ones, and even with the latest innovations, coal power does not qualify without using carbon capture and storage.
CSS technology involves capturing carbon dioxide from a power plant and burying it underground to help reduce emissions.
Mr Frydenberg said the government was “looking at all its options” to relax the 50 per cent emissions reduction guidelines that prevent it funding new coal-fired generators.
“The Government could issue a new mandate to the CEFC which would then inform its guidelines and would make possible an investment in a high-efficiency low-emission power plant,” he told ABC.
“We’re looking at all our options because we’re intent on stabilising the system.
“Right now we need more baseload power. Cleaner coal is one of those options together with gas-fired power, as well as ensuring more storage capacity for intermittent sources of generation, namely wind and solar.”
Opposition Energy Minister Mark Butler said the move would be an “outrageous act of vandalism” against a successful financing mechanism for renewable energy projects.
Queensland Energy Minister Mark Bailey also criticised the plan.
“The CEFC was set up as a new source of finance for renewable energy, energy efficiency and low emissions technologies – not to fund coal-fired power stations which would lock in high emission levels for 50 years, whether the latest technology is used or not,” he said.
“Investors and the energy industry won’t fund a new coal-fired power station because they know that their lengthy pay back periods mean huge amounts of money will be lost because of the rapidly falling cost of renewable energy.