MCA, Nationals flag coal’s importance in response to ACCC energy report

Groups, including the Minerals Council of Australia (MCA) and the National Party of Australia, have cited coal-fired power reforms as key to Australia’s issues with rising energy costs in response to a report from the Australian Competition and Consumer Commission (ACCC).

The consumer watchdog has recommended in its Retail Energy Pricing Enquiry report that a tightening of energy supply and demand brought about largely by the exit of large coal-fired generators has seen a price increase in energy bills by as much as 56 per cent since 2007–08, a situation they say could be rectified with the underwriting of new government energy contracts.

“The Australian Government should operate a program under which it will enter into low fixed-price (for example, $45-50/MWh) energy offtake agreements for the later years (say 6-15) of appropriate new generation projects which meet certain criteria,” the report stated.

It also recommends a prohibition on energy acquisitions that would limit market shares to 20 per cent in NEM regions to prevent “harmful concentration”.

While the report does not refer to coal-fired generation as a solution, instead referring to “firm product”, it still led to a response from coal energy advocates such as the MCA and Matt Canavan, Minister for Resources and Northern Australia of the National Party.

In a statement released yesterday, the MCA has claimed that a diverse energy mix would help to address the problem, including the implementation of coal-fired power plants as a least-cost option for Australian energy generation.

“The MCA has long called for measures to address policy risks stopping investment in least-cost power supplies which are available 24/7,” the statement read.

“Adopting the ACCC’s recommendation to address this policy gap would benefit all energy consumers — particularly Australian industry including the world-class mining sector, which uses more than 11 per cent of Australia’s power.”

The MCA is a staunch advocate of high efficiency, low emissions (HELE) coal plant technology of the kind in demand in Southeast Asia, China and India.

HELE coal-fired power plants are capable of reducing reliable base load energy under great pressures while reducing carbon dioxide emissions by 33–40 per cent by using technologies such as integrated gasification combined cycles (IGCC) and fluidised bed combustion (FBC).

Australia is expected to lose approximately 8000MW of base load coal and gas capacity by 2030, a decrease of 27 per cent. Currently, coal-fired energy generation makes up over three-quarters of electricity generation across the National Electricity Market (NEM), Australia’s largest energy market.

Canavan, a long-term supporter of coal power, stated on Twitter that the Nationals had “been vindicated” by the report. Prime Minister Malcolm Turnbull also commented, saying that the ACCC had made “a very interesting suggestion” with its report while also calling it “thoroughly technology agnostic”.

The full report from the ACCC can be accessed here.