A 40 megawatt upgrade to Vales Point power station's turbine is among a dozen projects the federal government will consider underwriting as part of a pledge to deliver more reliable and affordable power.
Subscribe now for unlimited access.
or signup to continue reading
As part of the scheme, the government would pay to upgrade each of the Lake Macquarie power station's two turbines by 20 megawatts.
The Vales Point B power station is owned by rich-listers Trevor St Baker and Brian Flannery.
"This government support will help add another 40 megawatts to the system," Mr St Baker said. "The upgrade means it has a life as long as coal is needed, certainly for 2029 at least."
The power station is run by Delta Electricity and is the only coal-fired power station in NSW not owned by AGL, EnergyAustralia or Origin.
Delta bought the power station from the NSW government for $1 million in 2015. It is now valued at $750 million.
The submission for an upgrade was one of many made by Mr St Baker. He also had plans to build a new high-efficiency, low-emissions coal-fired power plant at the site of the demolished Vales Point A Power station.
Delta Electricity company secretary Steve Gurney said the upgrade would involve installing new technology in the high pressure and intermediate turbine blades.
"Essentially it would make the plant more efficient," Mr Gurney said. "The plant would produce the same amount of electricity but with reduced emissions."
Prime Minister Scott Morrison said the government had whittled expressions of interest from 66 energy projects down to a shortlist of 12, which it will consider further before making a decision.
It will also investigate power projects in north and central Queensland to shore up reliable supplies to heavy industry, including a proposal to revive a decommissioned coal plant at Collinsville. If the Vales Point upgrade goes ahead, it would be done as part of a maintenance project next year.
READ MORE:
But Labor climate change and energy spokesman and member for Shortland Pat Conroy said the government's package of projects amounted to "policy on the run".
"This is this government's thirteenth energy policy in the past two-and-a-half years," he said.
"There's no firm information, for instance, how much is it going to cost taxpayers?"
Community health advocates said the power station's potential upgrade would significantly exacerbate the health impacts from toxic air pollution.
Epidemiologist and Doctors for the Environment spokesman Ben Ewald said the health burden from the turbine upgrade was unclear.
"If they generate more power from the same coal we will have the same pollution burden. If they generate the same power from less coal there would be a small pollution reduction, but if they are increasing the plant's power capacity by 40MW why would they not increase power output?," he said.
Mr Morrison is seeking to placate restless Nationals MPs who want the government to back a new coal project in regional Queensland before the election, while not alienating Liberal voters in metropolitan seats who are concerned about climate change.
Mr Morrison said the government was acting on a recommendation from the Australian Competition and Consumer Commission that it should investigate underwriting projects that provide flexible baseload electricity.
He emphasised that the underwriting scheme did not constitute a government investment, but would simply help the projects shore up finance.
"We are talking about a range of projects across the various fuel sources ... wherever it comes from, we just want what is going to provide the reliability that is necessary," Mr Morrison said.
The government will also commission and fund a feasibility study to address the "very specific problem in northern and central Queensland" - meeting the power needs of heavy industry, including an aluminium smelter.
The study will examine projects including a proposal to convert the old Collinsville coal-fired power station near Townsville into a high-efficiency low emissions plant.
"But there is no commitment to underwrite or support any of those projects. We want to do the proper analysis to work out which project or group of projects actually delivers on the need," he said.
Greens climate change and energy spokesperson Adam Bandt said the government should not be spending taxpayer dollars on coal-fired power.
"Any shortlist that includes coal is a shortcut to worse droughts and more bushfires," he said.
"The government shouldn't be upgrading coal, it should be shutting it down."
The Greens will seek to prevent government underwriting of coal when Parliament resumes in April.
