Pricing energy to create jobs in Australia

Today the Australian Minister for resources, Matt Canavan, spoke openly about his vision and concerns about the price of energy in Australia. Canavan was clear the price was not just what consumers pay for electricity but the cost measured in jobs lost if Australia continued its state-based existing policy. Canavan, is a Senator representing the State of Queensland and hails from Rockhampton, coal country.

In speaking to Sky Television’s Outsiders program today he remarked that the BP Energy Outlook 2019 Edition advised some 30 new coal-fired power stations were in construction in Asia and that some 700 the drawing board.

Canavan, reflected that it was better to build new generation coal-fired power stations and to continue to see more than a billion people burn coal and other materials in the open-air. He added that using Australian coal in these new generation coal-fired power stations that the quality of local air should improve.

He went on to remark, that the manufacturing heartland of Australia have been developed in Victoria because of its relatively cheap and abundant brown coal and the power stations built to exploit this. He reflected on the “politically correct” Victorian Labor government’s pressure to see these brown coal fired power stations closed and not replaced. He added, it was surprising to see as Victoria’s reduces its baseload power production it is asking for an extension cord into New South Wales where such baseload will continue to exist.

Canavan reflected if Australia continues to wish to have manufacturing jobs it will need to look at affordable energy. Currently the wholesale price of power is about AUD 0.10 a kilowatt hour (USD 0.07) and the Energy Minister is wanting to see this at AUD 0.075 (USD 5.20).

Canavan’s approach, is clearly consistent with the mandate granted to the government on 18 May this year. Scott Morrison and his coalition government know that they are in government simply because they reflect the views and aspirations of the majority of Australians.

Australians want to have relatively clean power but power which is affordable and will create and sustainable jobs. Many Australians remain concerned that the country is dominated by ideological zealots. These zealots do not deny affordable energy in the form of coal-fired power stations being built and supplied in Asia with this cold coming from Australia. They only seek change at home and perhaps for Australia not to export coal.

Given the proposed upgrade of the Mt Piper power station with a life of a further 24 years it is time that middle Australia said to government we need more long-term baseload power at affordable prices. They also said we don’t want blackouts. In the case of Australia this cannot come from Hydro, solar, biomass, geothermal, tidal or wind power. It won’t come from nuclear as to have an affordable nuclear industry in Australia we would not have the scale. Natural gas is now simply too expensive but makes an excellent energy choice for peaking. Given our abundance of relatively clean thermal coal which can be exploited relatively cheaply Australia is walking away from a huge opportunity by denying itself the building of new ultra supercritical coal-fired power.

Those same Australians that voted Scott Morrison and his Liberal National Party coalition government back into power want cheap baseload power.

In the case of Australia, it is clear what that should be. It is time for Morrison and his crew to commit themselves to this. It may be unpopular with some voters and the 10% of the population that voted for the Greens won’t be happy with anything we do. The majority of people want to see jobs created and sustained and the have reasonable price power bills with reliable power. 

The answer lies in the construction of 8 GW of new coal-fired power generation. Ultra supercritical coal-fired technology provides us with an ability to have this baseload power and be relatively clean. It is now time for the national government to say this and pressure the states to make this happen.

Paul Raftery