Push to get taxpayer funds for Vales Point coal plant upgrade rejected | Environment
A push by power baron Trevor St Baker to access a Morrison government climate policy initiative to pay for an upgrade at a 42-year-old coal power plant has been rejected after a review found it should not qualify.
As reported by Guardian Australia, the Vales Point coal plant in New South Wales was registered with the $2.55bn emissions reduction fund, the “direct action” policy introduced by Tony Abbott and extended by Scott Morrison, in August 2018.
Its owners, Sunset Power International trading as Delta Electricity, wanted to bid for taxpayers’ support to help pay for a $14m project to replace turbine blades.
The proposal stalled when the Clean Energy Regulator, which administers the fund, said the company had not provided enough information. It ruled the upgrade would have needed to cut the plant’s emissions intensity – how much it emits per unit of electricity generated – below the grid average.
A consultant working on behalf of Delta lobbied the government for the rules to be changed, arguing the guidelines for the fund said coal power could be eligible. Documents released last April suggest St Baker, the company’s part-owner, was denied an “urgent meeting” on the issue, but the then environment minister, Melissa Price, requested a review of how the policy could be used.
A scheduled review by the independent emissions reduction assurance committee was already under way at the time. The resulting report, posted online earlier this month, backs the existing rules enforced by the regulator.
The decision was welcomed by activists and analysts who argue coal plants, which emit substantial greenhouse gases, should not receive climate funding.
“Lobbying by coal executives has put much pressure on the government to allow greater access to climate funding for the coal industry,” Merzian said. “Fortunately, the independent review committee has made the right choice in maintaining the legal checks and balances that ensure the [fund] is not rorted.”
Suzanne Harter, a campaigner with the Australian Conservation Foundation, said it was unbelievable that an environment minister had asked officials to consider ways climate funding could be given to old coal plants. “Fortunately, common sense prevailed in this instance,” she said. “Public money should not be given to millionaires to prop up their ailing toxic investments.”
Delta Electricity’s chief executive, Greg Everett, declined to comment on Monday as the company was focused on its response to coronavirus.
Freedom-of-information documents last year showed the company’s consultant, John Short, had suggested to the government it would consider appealing to the administrative appeals tribunal if the regulator’s decision was not overturned.
Delta wanted to bid into the emissions reduction fund to help replace components on two units commissioned in 1978. It was estimated the upgrade would have cut emissions by 900,000 tonnes over a decade, about a 1.3% reduction below what Vales Point would otherwise expect to emit.
The company bought the plant from the NSW government for just $1m in 2015. It was re-valued at $730m two years later. Documents submitted to the Australian Securities and Investments Commission show Sunset Power International’s shareholders received dividends of nearly $72m over the past two financial years.
St Baker has flagged extending Vales Point’s operation beyond its expected closure date of 2029 to 2049. The company said a decision on prolonging the plant’s life was not contingent on public funding.
The emissions reduction fund works as a reverse auction, rewarding landowners and businesses that make cheap, viable bids for taxpayers’ support to cut pollution. The most recent auction bought emissions cuts equivalent to only 0.01% of Australia’s annual greenhouse gas pollution after officials found just three projects worth backing. The next auction is scheduled for this week.
Asked for a response to the committee assessment, a spokesman for the emissions reduction minister, Angus Taylor, said: “The government’s objective is to bring forward large volumes of genuine, low cost abatement from across the economy.”