Coal the Only Reliable Source of Energy, Says Mineral Council in Australia
By Ben Packham
May 25, 2018 - Australia's mining industry has lashed the government-owned Snowy Hydro, disputing its claim the $4 billion Snowy 2.0 project will “out-compete any new coal plant”, and declaring coal-fired power as the only energy source able to do the “heavy lifting” in Australia.
Minerals Council coal program executive director Greg Evans said coal’s dominance as an energy source was confirmed in the energy market operator’s latest summer report, which said coal provided 76 percent of large-scale generation capacity, and up to 89 percent in New South Wales (NSW).
Evans said pumped hydro projects such as Malcolm Turnbull’s Snowy 2.0 had a role to play in “firming” the energy provided by unreliable solar and wind energy. “But the heavy lifting of providing affordable and reliable energy can only be done by lowest-cost dispatchable energy supplies available 24/7,” he said.
Snowy Hydro chief executive Paul Broad told a Senate estimates hearing this week that a new high-efficiency low-emissions (HELE) coal-fired plant would not make money once Snowy 2.0 was operating.
“We will out-compete any new coal plant, with no subsidies, no government guarantees, nothing. We will out-compete them on price, and on reliability,” he said.
Evans blasted the claim as “not accurate”, citing a 2017 study by Solstice Development Services and GHD, which found a large HELE plant could deliver electricity as cheap as $40/MWh 24 hours a day.
Broad told Senate estimates that Snowy Hydro paid an effective cost of $40/MWh to pump water uphill, and sold the stored energy at $80/MWh.
Evans said taking into account capital costs, the wholesale price of Snowy 2.0 power would be closer to $100/MWh, and up to $120/MWh if the cost of new transmission infrastructure was included.
“Snowy 2.0 is not a 24/7 generation option across a long period of time,” he said. “At least half the time, electricity from other sources is used for pumping water to the upper reservoir. This level of availability can’t be compared to 24/7 dispatchable generation such as that provided by coal or gas. It’s also unclear what ‘cheap’ form of energy will be used for pumping if the objective is to shut down existing coal generation over time.”
Evans also dismissed claims that new coal-fired plants were not sufficiently flexible in a grid with growing wind and solar capacity.
“Claims that HELE coal is not flexible and can’t operate in a grid with renewable energy are wrong,” he said. “For example, the Neurath plant in Germany can ramp up and down by 500MW in 15 minutes and modern coal-fired power plants can turn down to 20 percent of full output.”
The Australian Energy Market Operator report revealed there had been no blackouts caused by insufficient supply across the national energy market last summer, the first summer since Victoria’s 1600MW Hazelwood power plant closed.
Evans highlighted the finding in the report that the coal fleet recorded its fourth highest summer availability for the past 10 years. “Coal-fired power generation kept lights and airconditioners on and kept businesses running in Australia during the past summer,” he said.
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