Briefing on plans for new coal-fired power stations in NSW

Briefing on plans for new coal-fired power stations in NSW

The NSW government is considering plans to build new coal-fired power stations—Australia’s single biggest source of greenhouse pollution. These plans would increase total NSW emissions by 36 per cent or 31 million tonnes.

Two new power plants would be built—one in the Hunter Valley near the Bayswater power station and the other in the Blue Mountains at Mt Piper near Lithgow. In addition there are plans to refit the existing Munmorah plant on the Central Coast so it can continue operating. The government has already begun the environmental assessment process and hopes to finalise the sale of development sites by the mid-2010.

The development applications for the new power stations say that they could be built as either coal-fired only, gas-fired only, or a combination of the two. The NSW government has been claiming the plants will not be coal-fired, citing the supposed disincentives in the Rudd government’s CPRS to the use of coal in energy generation. Planning Minister Joe Tripodi has claimed, “The Rees Government is preparing for the next generation of baseload power stations using more environmentally friendly gas-fired technology. With the prospect of carbon pollution pricing, gas will become an increasingly attractive fuel source for future base-load generators.” Gas would release half the emissions of coal-fired plants.

But experts such as Mark Diesendorf say carbon pricing under the CPRS will not be enough to encourage significant use of gas as an alternative energy source to coal. His assessment is that: “At best, some black coal will substitute for some brown coal and a little more gas will be used for electricity generation and heating, but even this is unlikely because the long-term prognosis is that gas prices will rise steeply as more Australian gas is traded on the world market.”

In addition a gas pipeline to the Bayswater site would have to be build from Queensland at a cost a billion dollars. Suspiciously the development application for the Mt Piper site does not include plans for any gas pipelines. Yet both sites are adjacent to existing coal-fired power stations and near substantial coal fields.
The prospect of new coal-fired power plants shows everything that is wrong with the government response to climate change—both state and federal. Instead of driving a transition to much greater use of renewable energy Kevin Rudd’s emissions trading scheme—the CPRS—is allowing this expansion of coal power to happen.

NSW “energy reform” strategy

The plans for new power stations are the product the state government’s wider strategy for the power industry in NSW. Plans for privatisation of the power industry have been actively opposed by unions and Labor party rank-and-file members for many years. At the end of 2008 a union and community campaign stopped the privatisation of power stations and forced the resignations of former Premier Morris Iemma and Treasurer Michael Costa.

The NSW government continues to argue that more baseload energy generation capacity is needed by 2013 or 2014, meaning it needs to build new power stations. Their “energy reform” strategy is based on trying to get the private sector to pay for the building of new power stations. This is based on the Owen report, which was set up by the government to justify privatisation. But its recommendations did not properly consider the use of energy efficiency measures to reduce growth in electricity demand. According to research done for NSW Greens MP John Kaye, phasing out off-peak hot water systems would make a new power station unnecessary.

At the end of September 2009 the state government called for expressions of interest in buying parts of the state-owned power industry. It plans to sell off electricity retail companies EnergyAustralia, Country Energy and Integral Energy, putting 2000 jobs at risk and lease the “trading rights” to power produced by the generators. This will mean the private sector will control how the power stations are run by imposing decisions about maintenance, day-to-day operations and industrial relations. This is a way of beginning the privatisation of the existing power stations, and will lead to full privatisation by stealth.

But development sites for new power stations are also being sold, with the aim of getting the private sector to build new privately-run power stations. These are the sites where new coal power stations will be built. The state government plans to allow the private sector to build and operate the new plants. This means NSW would have fully privatised power stations.

If new power stations are built in NSW, we should demand they use renewable energy sources. Each new power station built locks in increased carbon emissions for 30 to 40 years—the lifespan of a new power plant.
Building new power stations using renewable energy could provide more jobs than currently exist in coal-fired power stations, according to research by the Centre for Full Employment and Equity. This ensures that, given political will, a just transition for workers in the coal industry is possible.

Mark Diesendorf, Climate Action: A campaign manual for greenhouse solutions, UNSW Press, 2009, 56.
Keith Orchison, “Generation hijinks in NSW” Business Spectator, October 5 2009, http://www.businessspectator.com.au/bs.nsf/Article/Generation-hijinks-in-NSW-pd20091005-WHUXL?OpenDocument
See Riedy, C & Daly, J, 2007, Electricity Supply in NSW: Alternatives to Privatisation, Research Report, prepared by the Institute for Sustainable Futures for the Public Interest Advocacy Centre, November.
Such as Anthea Bill, William Mitchell et al, A Just Transition to a renewable energy economy in the Hunter Region, Australia, Centre of Full Employment and Equity, June 2008.