Funding clean coal

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 02 Jun 2017   Posted by admin

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Federal Energy minister Josh Frydenberg visiting the Petra Nova carbon capture and storage facility in Texas in April this year.


 

BY ELIZABETH FABRI


THE Federal Government has introduced legislation changes that will allow for greater investment in carbon capture and storage (CCS) technologies.


On 30 May, Federal Energy minister Josh Frydenberg announced the Turnbull Government would remove legislation prohibiting the Clean Energy Finance Corporation (CEFC) from investing in CCS technologies, which had the potential to reduce carbon emissions by up to 90 per cent.

The $10 billion taxpayer-funded loan facility was established back in 2012 by the former Labor Government to invest in renewable energy, but not nuclear power or CCS technology.

Mr Frydenberg said the decision to change the legislation was not only consistent with the Government’s “technology-neutral approach” but would also enhance energy and job security, and better environment outcomes.

“CCS is a proven technology being deployed globally with 17 large-scale commercial CCS facilities already in operation storing around 30 million tonnes per annum of carbon dioxide,” Mr Frydenberg said.

“The CEFC’s ability to invest in CCS technologies will complement other low emissions investment by the Federal Government including more than $3 billion worth of wind, solar and storage projects.”

Mr Frydenberg said access to finance had been one of the main road blocks that prevented CCS projects from being developed in Australia.


“We’ve had nine coal fired power stations that have closed over the last five to six years, often with very little notice periods, and Hazelwood was a good case and point,” he said.


“Without the level of investment certainty as to what the regulatory environment will be long term, we haven’t seen a coal fired power station built in Australia since Kogan Creek in Queensland in 2007, and we haven’t seen a gas fired power station built since Mortlake in 2010.”

Since 2009, the Government had sunk more than $590 million worth of research and development into High Efficiency Low Emissions coal fired power stations and CCS technology.

Australia did not yet have a modern High Efficiency Low Emissions coal fired power station running, or a station with CCS.

Mr Frydenberg said this money went towards a range of initiatives, including pilot projects across the country.

“These pilot projects and research and development programs have helped set the scene for what later this year will be Australia’s first and one of the world’s largest CCS commercial-scale projects at the Gorgon gas field off the coast of Western Australia,” he said.

“Later this year it is expected to start injecting up to four million tonnes of CO? per year into the Dupuy Formation two kilometres below the surface.”

While the news received opposition from environmental groups, it was welcomed by a large number of industry bodies including the Australian Petroleum Production & Exploration Association (APPEA).

APPEA chief executive Malcolm Roberts Dr Roberts said access to CEFC financing would help overcome capital and financing obstacles for CCS projects.

“CCS is seen as one of the pathways to the continued use of fossil fuels in a low-carbon economy,” Dr Roberts said.

“Support for CCS projects is consistent with the CEFC’s function to finance Australia’s clean energy sector using financial products and structures to address the barriers inhibiting investment.”

Minerals Council of Australia executive director coal Greg Evans said it was clear Australians wanted affordable power with 24/7 availability, and base load coal was a way to achieve this, and now had a low emissions pathway.

“CCS is very much part of the future here and internationally if we are to maintain affordable energy and other key industries including steel making and cement production,” Mr Evans said.

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