Australia’s Renewable Energy Chaos Has Investors Clamouring For Coal-Fired Power Plants

Full-steam ahead: RE disaster turns Liddell into a glittering prize.

 

Remember all those stories about wind power replacing coal? No? STT has forgotten them, too.

An idiotic obsession with wind and solar power, has sent power prices rocketing and placed Australia’s once perfectly reliable power grid on the brink of collapse.

That those states connected to the Eastern Grid (QLD, NSW, SA, Victoria and Tasmania) avoided a complete ‘system’ black during the Summer just past was more good luck than good management.

During the few short spells of hot weather, grid managers employed what’s euphemistically called ‘demand management’, chopping hospitals and energy hungry businesses from the grid; a tactic not used much since the fall of the Berlin Wall.

States like Queensland and NSW – with plenty of coal-fired plant – are still blessed with an abundance of baseload generating capacity; unlike SA and Victoria.

AGL owns one of those plants, Liddell in NSW and, with its propaganda pitch about “getting out of coal”, a form of panic has struck at the prospect that it really will pull that plant from the grid. (Although, for some strange reason, it’s just determined to throw $200 million at its other big coal-fired plant in NSW, Bayswater.)

While AGL prevaricates about the future of Liddell, there’s a disorderly queue lining up to buy it.

China push to buy coal plant
The Australian
Greg Brown
27 March 2018

The Chinese conglomerate that controls Australia’s largest cotton farm has approached Malcolm Turnbull’s office to ­express interest in buying the Liddell coal-power plant in the NSW Hunter Valley.

Former Australian rugby union great Nick Farr-Jones wrote to the Prime Minister’s ­office in December declaring that his client, Shandong Ruyi Group, was interested in buying the 45-year-old plant, which AGL is closing in 2022.

Mr Farr-Jones, the director of consulting firm Taurus Funds Management, wrote that Shan­dong Ruyi, which has a controlling stake in the $240 million Cubbie Station cotton farm in southwest Queensland, wanted to invest in clean-coal technology and become a player in the Australian energy market.

The captain of Australia’s 1991 World Cup-winning Wallabies rugby team suggested the government should raise Shandong Ruyi’s interest in Liddell when it lobbied AGL to sell the coal-power plant to a third party.

AGL so far has refused the government’s request to extend the life of the 1800-megawatt power station, instead planning to replace Liddell’s power capacity with renewables, gas and a planned battery.

The Australian reported last week that Liddell’s closure may cause power outages because only 100MW of the replacement capacity has been funded.

In an email sent to Mr Turnbull’s deputy chief of staff, Clive Mathieson, on December 15 last year, Mr Farr-Jones said a senior representative of Shandong Ruyi met Scott Morrison in the middle of last year to detail the company’s ambition to invest in Australia’s power sector, including in thermal coal assets.

Shandong Ruyi, which is chaired by Qiu Yafu, specialises in textiles but in recent years has expanded into other industries including energy and real estate. The group bought the 96,000ha Cubbie Station in 2012, sparking intense criticism from the Nationals, but must reduce its initial 80 per cent stake in the farm to 51 per cent by late this year.

“Following the recent announcement by AGL that they ­intended to close the Liddell coal-fired power station in coming years, I thought I would drop you a quick note regarding a client of ours who would definitely be prepared to invest in latest-­technology, low-emission, coal-fired power,” Mr Farr-Jones wrote. “To that extent they would review the current Liddell plant with a view to extending the life of the plant to provide reliable, lower cost power to NSW. They would also look to invest in Queensland, particularly north Queensland.

“Around six months ago I met with the Treasurer (Minister Morrison) with the son-in-law of the president of Ruyi to make sure he was aware of Ruyi’s intentions to invest in the power sector in Australia.”

Nick Farr-Jones

 

The Australian understands Mr Mathieson, who had dealings with Mr Farr-Jones when he worked in the NSW Premier’s office, acknowledged the receipt of the email.

A spokesman for Mr Turnbull earlier has said no response was provided to Mr Farr-Jones, and that the Prime Minister’s office did not raise Shandong Ruyi’s interest with AGL.

Shandong Ruyi, one of China’s largest integrated textile companies, has partnered with Chinese state-owned company ­Huaneng Power on power projects globally, including building low-emission, coal-fired plants in Pakistan, Mr Farr-Jones’s email said.

Mr Farr-Jones, a former City of Sydney councillor who was flagged as a potential replacement for Mr Turnbull in the seat of Wentworth before the 2010 election, would not comment on the email to Mr Mathieson, a ­former editor of The Australian, or his relationship with Shandong Ruyi yesterday. He confirmed he knew of a party who was interested in buying the Liddell coal power plant if it proved to be economical.

Mr Farr-Jones said he had not approached AGL because he was waiting to review the government’s independent advice from the Australian Energy Market Operator. Last week AEMO advised the government that AGL’s replacement plan for Liddell was potentially insufficient. It is awaiting a response from AGL.

Mr Farr-Jones said he would “strongly encourage” the government to ask AGL to divest plant to another party if there was the potential to make it economical.

“I’m obviously doing it for business reasons but there is another reason: it gets to me the impact that renewable energy and the subsidies required to make that power economical has on these horrifically increasing electricity prices and the impact it has on families in Australia,” he said. “My concern is for all consumers but particularly for families who are in the low socio-economic group and particularly elderly people who worry a lot, hence they don’t cool their place in summer and heat their place in winter.

“If the plant was available then any third-party purchaser would obviously need to conduct detailed due diligence on the economics of investing multiple millions of ­dollars in extending the life of the plant into low-emission technology,” Mr Farr-Jones said.

UPDATED: Tony Abbott and Barnaby Joyce have both used the Coalition partyroom meeting to urge Malcolm Turnbull to do more to keep the Liddell coal power station open.

According to a government MP, Mr Abbott raised an article in The Australian this morning and asked why the government did not attempt to facilitate a sale of the plant to Chinese group Shandong Ruyi.

Mr Turnbull responded by saying the government was not Liddell and could therefore not sell the coal-fired plant in the Hunter Valley. He added the government was agnostic on energy sources.

Mr Joyce spoke in the partyroom to say it was important the 45-year-old power station stay open.
The Australian

Now, why on Earth would anyone think that you could make money out of a ‘decrepit’ coal-fired power plant?

Oh, that’s right, businesses and households need power 24 x 365, whatever the weather.

Grand old lady needs a new life
The Australian
Editorial
29 March 2018

In September last year, after Malcolm Turnbull called on AGL to commit to keeping its Liddell Power Station open for five years beyond its planned 2022 closure or sell it, the energy giant invited media for a tour of the 46-year-old plant in NSW’s Hunter Valley to showcase its faults. Liddell was “an old lady and you can’t ask an old lady to run a marathon a few days in a row without falling over”, journalists were told. Fast forward six months and a potential alternative is at hand, with Chinese conglomerate Shandong Ruyi, majority owner of Cubbie cotton station in southwest Queensland, willing to buy and invest in Liddell, as The Australian revealed this week.

Scott Morrison has taken a strong lead in confirming that the government would approve a sale to the Chinese company under foreign investment rules. Shandong Ruyi, a major textile company, has partnered Chinese state-owned company ­Huaneng Power on power projects, including building low-emission, coal-fired plants in Pakistan.

The Liddell station is not for sale. But AGL has rejected claims it was holding on to it as it wanted power prices to stay high to boost profits. AGL reportedly plans to replace coal-fired power with gas, renewables and a battery. The Prime Minister would do well to double down in supporting his Treasurer’s stand and urge AGL to sell to a buyer that regards the plant as viable. On Tuesday, Greg Brown reported that former Australian rugby union captain Nick Farr-Jones, on behalf of the Shandong Ruyi Group, his client, had written to Mr Turnbull in December to tell him the group was interested in buying Liddell.

Shandong Ruyi was “prepared to invest in latest-­technology, low-emission, coal-fired power”, Mr Farr-Jones wrote. The company would review the Liddell plant with a view to extending its life to “provide reliable, lower cost power to NSW”. Unfortunately for consumers and small businesses struggling with soaring power bills, Mr Turnbull did not raise the issue with AGL.

Last week, Energy Minister Josh Frydenberg wrote in these pages that the Turnbull government was concerned about the impact of AGL’s proposed closure of Liddell, which “supplies more than 10 per cent of NSW’s demand, including providing power for more than one million homes and contributing to the energy needs of large industrial customers such as the Tomago aluminium smelter”. The national grid needs that power, at least for the foreseeable future.

Last week, we reported that Liddell’s closure might cause power outages because only 100MW of the replacement capacity had been funded so far. In South Australia, as the new Marshall government sorts out the energy mess left behind by Labor, it is looking to build a new interconnector to NSW to boost SA electricity supplies. The continuation of Liddell would help ensure a more reliable and cost-effective supply was available.

At this week’s Global Food Forum, sponsored by The Australian, Australia’s exorbitant power costs — despite our nation being one of the richest in natural resources — have been identified as a major problem for food producers. Sunny Verghese, co-founder of the Singapore food company Olam International, told the forum that Australia had the highest energy costs of any of the 70 countries in which Olam, Australia’s largest almond producer, did business. Despite Australia’s comparative advantage in power generation, Mr Verghese correctly described the system as “broken” — an indictment on decades of failure by successive federal and state governments.

His concerns were reinforced by Australian Competition & Consumer Commission chairman Rod Sims, who said high energy prices were the biggest crisis facing the nation. Mr Sims said the focus should be on affordability because of the high cost of guaranteeing reliability of supply. Consumers expect both, which is why the Chinese proposal for Liddell is worth pursuing. As Mr Frydenberg wrote, the focus must be on driving more dispatchable power into the market.
The Australian

Never up to the task: wind power poses its own biggest threat …

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. swan101 says:

    Reblogged this on UPPER SONACHAN WIND FARM.

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