Committee dismisses calls to use climate funds for coal plant upgrades

A push by lobbyists to access the federal government’s Climate Solutions Fund in order to cover the cost of upgrades that would extend the operational life of coal-fired generators has been rejected by the independent Emissions Reduction Assurance Committee.

March 25, 2020 Marija Maisch

Image: Wikimedia Commons

An independent review into the Federal Government’s Climate Solutions Fund has dismissed calls by lobbyists to access dedicated climate funding for upgrades to coal-fired power plants. In its decision, the Emissions Reduction Assurance Committee (ERAC) said that it would be difficult to estimate the impact of upgrading a generator on the overall emissions, particularly when the upgrade could potentially extend the generator’s operating life and lead to an overall increase Australia’s greenhouse gas emissions.

The ERAC conducted the review on the Morrison government’s request made last year following a push by the coal lobby to excess the $2 billion Climate Solutions Fund. The owner of the Vales Point power station, Trevor St Baker, was particularly persistent in his calls for funds to be directed to the 42-year-old Vales Point power station in New South Wales, which has already been shortlisted for taxpayer funds under the Morrison government’s Underwriting New Generation Investments (UNGI) program.

The plant’s owners, Delta Electricity, wanted to bid for taxpayers’ support to help pay for a replacement of turbines at the ageing coal generator, arguing that this would reduce the overall emissions of the facility. After the company’s push was stalled by the Clean Energy Regulator, former federal environment minister Melissa Price requested a review of how the fund could be used.

“The Committee concluded that the proposal was not sufficient to address the extension risks associated with coal-fired generator upgrades,” the ERAC report says. On top of this, the committee also rejected a call for carbon, capture and storage projects to be eligible for funding under the Climate Solutions Fund.

The ERAC report was welcomed by The Australian Institute (TAI), saying that the committee’s decision showed the value of “truly independent entities” that served the public on climate change.

“Lobbying by coal executives has put much pressure on the government to allow greater access to climate funding for the coal industry,” Richie Merzian, Director of TAI’s Climate and Energy Program, said. “Fortunately, the independent review committee has made the right choice in maintaining the legal checks and balances that ensure the Climate Solutions Fund is not rorted.”

The $2 billion Climate Solutions Fund, an extension of the Abbott-era Emissions Reductions Fund, represents one of the main pillars of the Australian federal government’s climate policy intended to help it achieve its Paris Agreement goal by 2030. Therefore, leaving coal-fired generators out of the fund was a particularly significant win.

“Power stations like Vales Point pump seven million tonnes of greenhouse gases into the atmosphere each year, and every year they operate past their retirement age, is another year fuelling climate change and its devastating impacts such as the recent fires,” Merzanin said. “The ERAC also resisted industry calls to water down the funding method to support carbon capture and storage, which has been a major failure despite receiving $1.3 billion in government funding to date.”

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