Report backs clean coal generation

Clean coal power plants are viable and affordable, according to a new report commissioned by the Minerals Council of Australia (MCA).

In the 550-page report, Solstice Development Services GHD examines the costs of building new high efficiency low emission (HELE) coal generation and the implications on electricity charges.

Estimations show a 1000MW modern HELE or ultra supercritical (USC) power station could be built for $2.2 billion.

This figure is based on savings accrued from utilising a brownfield site and sourcing specialized equipment from Asian, and is $900 million cheaper than previous estimates.

“This demonstrates that HELE coal plants – which would have operating lives of several decades – are viable and affordable options for replacing Australia’s existing ageing coal fired power stations,” Mr Evans said.

The study also reviewed wholesale electricity costs for different technologies expressed on a long run marginal cost (LRMC) basis, using a consistent methodology to allow comparison.

Based on provision of a 650MW standalone power station capable of producing at least two to three days of electricity independent of the weather, the study found USC black coal is the lowest cost generation option at $40-$78 per MWh in (2017 prices) on a LRMC basis.

“Other synchronous generation had higher wholesale costs, including combined cycle gas at $69-$115 per MWh and open cycle gas at $179-$430 per MWh,” Mr Evans said.

“Variable renewable energy (VRE), which is not available 24 hours a day, also has higher costs, including solar at $90-$171 per MWh and wind at $64-$115 per MWh.

“At assumed average capacity factors of 20 per cent and 37 per cent respectively for solar and wind, these technologies are not only more expensive but unsuitable without ‘firming’ or back up generation to emulate baseload performance.”

Mr Evans said the report confirms USC coal generation can deliver on the priorities of affordability, reliability and low emissions.

“It concludes that the imminent retirement of coal plants in NSW and Victoria provides opportunities for constructing and replacing them with USC plants by the early 2020s,” he said.

“Additional capacity may also be required in Queensland in the medium term under a higher economic growth assumption.”

Mr Evans said the report also points out VRE integration would only be possible when accompanied by fast-reacting, mid-merit, fossil-based technologies such as HELE which provide readily available back up capacity to hedge against the variability and lack of strength of VRE generation.

“Reducing greenhouse gas emissions is important and replacing the existing coal fleet with HELE technology would save 44.2 million tonnes of CO2 or over 25 per cent of National Electricity Market coal generation emissions,” he said.

“Coal-fired generation is the cheapest and most reliable electricity source in Australia available 24 hours a day, every day.

“Australia has access to the highest quality coal in our own backyard and the rest of the world pays a premium to use it.

“There is little sense in not utilising coal for our own electricity generation when HELE technologies are affordable and reliable and will help reduce emissions.”