Prime Minister Scott Morrison has today announced the government will build a gas-fired power station in the NSW Hunter Valley if AGL’s Liddell coal-fired power station is not replaced.
The intervention stipulates that in order to stop an expected price increase for consumers, ‘dispatchable’ power needs to fill the gap in the market Liddell’s shut down is expected to create.
The plan involves financial and policy support for five new gas fields, as well as more pipelines to transport gas to Sydney, Melbourne and other markets.
AGL intends to retire Liddell Power Station in April 2022, but has outlined plans to replace it with renewables and battery storage.
However, the government documents reveal the government will set a “dispatchable capacity investment target” of 1000MW in NSW by April 2021, requiring it to come online by the end of 2023.
The Federal Government says Snowy Hydro Limited is developing options to build a gas generator in the Hunter Valley at Kurri Kurri should the market not deliver what consumers need.
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“If the energy companies step up to deliver on the target, the government will step back,” one of the documents says.
The news has been met with mixed reactions from the industry.
The Energy Users Association of Australia (EUAA) said it welcomes the announcement as it “will deliver much-needed gas market reform”.
EUAA CEO Andrew Richards said, “We thank the Federal Government for listening to consumer concerns that have been independently verified in successive ACCC reports over the last four years.”
On the other hand, environmental and renewable energy advocates say the move sets the industry, and climate back.
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Solar Citizens national director Ellen Roberts said Scott Morrison’s pledge of public money for gas fired power for the Hunter Valley will lock the region in to higher power prices.
“Towns currently dependent on gas generation, like Mount Isa in Western Queensland are now turning to cheap renewable energy to power existing heavy industry. Solar, wind and storage are much cheaper than expensive polluting gas,” she said.
“By pushing gas fired power, Morrison is locking in high power prices for the Hunter Valley–the last thing the region needs.”
Meanwhile in Queensland, the Palaszczuk Government is feeling left out.
Mines and Energy Minister Dr Anthony Lynham demanded the Federal LNP provide the same support to Queensland gas and manufacturing industries and jobs as they had to New South Wales following calls from the Palaszczuk Government since 2017.
“The Federal Government gave NSW a billion dollars to open up their gas fields and have ignored our calls to invest in gas and electricity infrastructure,” he said.
“And yet Queensland has been doing the heavy lifting on gas supply and policy for the past five years.
“It’s about time the LNP responded to our calls, but where’s Queensland’s billion dollars?”