"Much of this increase is being driven by a $17 billion spend on the
existing poles and wires network.

"Up to a third of this cost could be avoided by using renewable energy
as a solution to household power needs.

"NSW faces the prospect of creating 'fuel poverty', where some of the
state’s most vulnerable households will be forced to go cold this winter.

"Households should not have to bear the brunt of over two decades of
mismanagement of the state’s publicly owned electricity sector.

"Renewing the state’s electricity infrastructure is a perfect opportunity
for the NSW government to move to the proven technologies provided
by solar and wind.

"Instead of throwing cash at an old-fashioned technology that is beyond
its use-by date, the NSW government should be investing in smart grids
that can help households manage their power use.

"NSW Premier Kristina Keneally must act to make renewable energy the
primary focus for new electricity infrastructure," Dr Kaye said. 

For more information: John Kaye 0407 195 455 

“The Owen inquiry was manufactured by the Iemma government to justify its privatisation agenda. The exaggerated claims of generation capacity shortages have been completely discredited.

“The latest data from the Australian Energy Market Operator (AEMO) shows that NSW has sufficient baseload capacity for reliable supply beyond 2016.

“It is highly improbable that Mt Piper will be gas powered given the distance to the nearest pipeline and the costs of connecting up supply.

“Even Bayswater is much more likely to be coal-fired. Risks of substantial price rises resulting from an East Coast gas export terminal will make gas a much less attractive fuel, even if the Senate passes the Rudd government’s highly ineffective Carbon Pollution Reduction Scheme.

“Coal-fired stations will increase the state’s greenhouse gas emission by 15.1 per cent and gas by 7.1 percent.

“This is an unacceptable increase to the state’s burden on the climate.

“The Keneally government is turning NSW into an international greenhouse pariah.

“The future of jobs in the clean energy industry has been dealt a savage blow.

“Thousands of jobs in solar thermal energy, wind power and energy efficiency are being sacrificed to the myth that only coal can keep the lights on.

“The NSW government continues to trade on the clean coal fairy tale.

“Carbon capture and storage will not be available in the time scale needed to respond to global climate change. If it ever works, it is likely to be very expensive.

“Clean coal and gas are nothing but green-wash for a climate killing policy of swamping the state with excess coal-power.

“The approval of new power plants shows the Keneally Government is not serious about addressing the threat of climate change.

“If they were, they would be announcing planning approval and direct public investment for large-scale solar thermal power plants to replace the state’s highly polluting coal-fired generators,” Dr Kaye said.

For more information:       John Kaye 0407 195 455

Background

Planning Minister Tony Kelly has announced his approval for the concept plans for two new coal or gas fired power stations, each of 2,000 MW.

This is the end product of the power privatisation process started by former Treasurer Michael Costa.  The sites with concept plan approval will be offered for sale  to the private sector with the aim of luring them into developing $10 billion of new baseload capacity.

Even with a $30 per tonne CO2 cost, coal is likely to be more attractive to a private sector developer than gas. The carbon price impacts on a coal fired power station would be about $24 per MWh and about $10 per MWh on gas. The $14 per MWh carbon price benefit of gas would be swamped by probable surge in gas prices from the construction an East Coast export terminal.

Greenhouse gas emissions

Figures based on the project environmental assessments. Percentages based on 2007 National Greenhouse Accounts, NSW Inventory total (excluding LULUCF) of 151.6 Mt CO2e in 2007

It also relies on a flawed study to justify the need for new baseload power and relies on the federal government’s non-existent Carbon Pollution Reduction Scheme to address the climate change consequences of the power stations.

The Greens are calling on the Keneally government to dump the power station proposals and instead create a renewable energy future for this state.

Background

In June 2009, publicly owned generation utilities Macquarie Generation and Delta Electricity lodged development applications for two 2,000 MW power stations adjacent to their generators at Bayswater in the Upper Hunter and Mount Piper near Lithgow.

The projects have been declared to be ‘’critical infrastructure” under part 3A of the Environmental Planning and Assessment Act. They will be determined by the Minister for Planning, despite the obvious conflict of interest.

The applications were part of the NSW government’s ‘electricity transactions’ (i.e. privatisation) which included the sale of two sites with development approval.

The private sector purchasers are supposed to choose between coal and gas as a fuel source, although the Mt Piper site does not have access to a suitably sized gas pipeline.

The Environmental Assessment Reports (EAR)[1] for each project were released for public comment on 25 September and closed a month later on 26 October.

The applicants’ responses to public comments have now been placed on the Department of Planning’s website.[2]

The reports, prepared by environmental consultants SKM and AECOM, pay lip service to the legitimate objections of the general public, environment and climate groups, local councils and other organisations.

Flawed justification

Numerous submissions questioned the need for new baseload power. Both responses relied on the Owen Inquiry which asserted that NSW would require new baseload generation from 2013/14 to meet growing demand and to avoid energy shortfalls.

Both responses acknowledge that subsequent demand projections by the Australian Energy Market Operator (AEMO) are more up to date. AEMO’s 2009 Electricity Statement of Opportunities (SOO)[3] indicated that an additional capacity of 182 MW would be required in NSW by 2015/16.

The Mt Piper response specifically states that “it is to this forecast shortfall that the project is responding”.[4]

This justification is deeply flawed. The 2009 AEMO report showed that that even without the two baseload plants an electricity shortfall is not likely to occur until after the planning horizon at 2018/2019.

NSW Renewable Energy Opportunities

The response to submissions for the Bayswater B project dismisses the role of renewable energy as a viable alternative to fossil fuel for baseload power. The document suggests that NSW is generally unsuited to renewable energy generation.

The response[5] claims in relation to NSW meeting the federal government’s Renewable Energy Target of 20%:

 “It may be difficult for NSW to meet that target as, with the exception of solar energy, other states have better renewable resources”.

The response goes on to qualify its comments about solar, suggesting that only the far north west of the state is suitable for large scale solar projects.[6]

Specifically in relation to wind, the document[7] refers to the EA’s assessment that “NSW is regarded as having inferior wind resources,” and claims[8] that “the majority of NSW is not suitable for wind turbine facilities”. 

Writing down the role of renewable energy in displacing the need for new baseload fossil fuel power stations runs contrary to the government’s own statements and the efforts for private industry investment in renewable energy projects in NSW. 

On 9 February 2010, the Premier announced approval for the 113MW Kyoto Energy Park near at Scone in the Upper Hunter Valley. The project includes a mix of wind turbines, solar panels and a small hydroelectric generator. The Premier commented at the time that[9],

“This is about harnessing the wind and the abundant sun of Australia.”

In announcing the decision the Premier was keen to talk up the prospects of wind in NSW noting that:

“Over the past six years, 17 wind farms have been approved by the NSW Government and local councils, with the potential to supply up to 2,926 megawatts to the State’s electricity grid.”

Information from the Department of Planning[10] shows that wind projects in projects in NSW, either constructed, under construction or planned, are located in diverse areas of the state including the Upper Hunter, Broken Hill, Goulburn, Upper Lachlan and New England Tablelands.

While there are few large solar projects constructed or planned for NSW, both the Kyoto Energy Park project and the solar thermal augmentation facility at the existing Mt Piper power station are far from NSW’s North West.

Climate Consequences

The responses do not address the substance of the concerns over proposed plants’ greenhouse gas emissions, instead relying on the federal government’s yet-to-be passed Carbon Pollution Reduction Scheme to contain climate impacts.

The responses also dismiss Carbon Capture and Storage as a viable emissions reduction strategy.

The Greens analysis suggests that the two projects will increase NSW greenhouse house gas emissions by 15 percent if coal fired and as much as seven percent if gas.

The Bayswater response admits: “The impact of these ghg emissions on the environment is a subject we are not qualified to determine.”[11]

Both responses make comment that the projects are designed to fit within the Commonwealth’s draft CPRS legislation, with any operator being required to purchase permits for emissions produced.

In the event that the CPRS passes, that scheme would allow all permits to pollute to be purchased overseas as carbon offsets, in some cases created by projects of dubious climate benefit . Without the CPRS, there is no mechanism to require the abatement of these emissions.

The Environmental Assessments for the two projects assert that if built as either coal or gas plants, they would be constructed to be ready to be fitted for carbon capture and storage. The responses suggest that the inclusion of CCS as an emissions reduction strategy is unlikely to occur at anytime. The Bayswater response states, “There is uncertainty in both the timing and cost of CCS[12]”.

The Mt Piper Extension response casts further doubt over CCS:

“Approval of a coal or gas fired plant is not contingent on immediately available CCS technology but a decision would be required , when CCS is commercially available, as to weather it is a better commercial decision to install the technology and reduce the level of greenhouse emissions or th continue to purchase permits within the constraints of the trading cap”[13]

Comments

Greens NSW MP John Kaye said: “The NSW government has written off the state’s renewable energy future, preferring instead to rely on outdated and inaccurate predications of a shortage of baseload power to justify their expansion plans.

“Massive wind development in the state’s West and possibilities for solar thermal generation in the Central West put paid to the Keneally government’s myths that NSW lacks renewable resources.

“The Keneally government continues to drive the state towards an economic and environmental dead-end.

“Building new fossil fuel baseload plant will devastate the future of renewable energy and energy efficiency in this state and cost tens of thousands of jobs. 

“The Australian Energy Market Operator’s evidence clearly indicates that there is no need for these giant baseload power stations. They would destroy opportunities for the development of a renewable energy industry in the state and will impose massive cost burdens on households and businesses.

“The Keneally government’s generation utilities dismissed genuine concerns about the climate impacts of 4,000 MW of new gas or coal fired generators. They had no response to the climate impacts of a 15 percent boost to the state’s emissions. Instead they buck passed the problem to the Rudd government’s ineffective and yet-to-be passed Carbon Pollution Reduction Scheme.

“The NSW government is in a major conflict of interest. The Minister for Planning is determining applications lodged by the orders of the Treasurer. There is no hope for a fair outcome that reflects the lack of need, the appalling environmental and economic impacts and the existence of cost-effective alternatives.

“The NSW government has grossly exaggerated the need for new generation in this state. Starting with an insignificant forecast for 182 MW of additional peak generation or energy efficiency measures, the Treasurer has manufactured to a massive 4,000 MW baseload shortfall,” Dr Kaye said.

For more information: John Kaye  0407 195 455

References:

Department of Planning Major Project Register, Bayswater B:

http://majorprojects.planning.nsw.gov.au/page/project-sectors/transport--communications--energy---water/generation-of-electricity-or-heat-or-co-generation/?action=view_job&job_id=3327

Department of Planning Major Project Register, Mt Piper extension:

http://majorprojects.planning.nsw.gov.au/page/project-sectors/transport--communications--energy---water/generation-of-electricity-or-heat-or-co-generation/?action=view_job&job_id=3325