‘Brownout’: Aussies find promising mine to bury coal in | Web News Observer

‘Brownout’: Aussies find promising mine to bury coal in

Coal is unloaded onto large piles at the Ulan Coal mines near the central New South Wales rural town of Mudgee in Australia, March 8, 2018. Picture taken March 8, 2018. Source: REUTERS/David Gray

The partners behind a creative plan to address climate risk are playing their cards too close to their chest. On Wednesday electricity provider EnergyAustralia and the state government of Victoria unveiled an agreement to close the 1,480 megawatt Yallourn coal plant, the country’s dirtiest power station, four years ahead of schedule in 2028. It could be a blueprint for others, if only the two parties were not so shy about key features of the deal.

The two sides, which spent a year in negotiations, are talking up the support package for the plant’s 1,000 full-time and seasonal workers and how greenhouse gases will drop. The brown coal burned at Yallourn accounts for 13% of emissions in Australia’s second-most populous state.

EnergyAustralia has also committed to build a 350 MW battery in the region by 2026 that would, if put into operation today, be the biggest in the world. That suggests the firm run by former British Gas executive Catherine Tanna has cooled on using fossil gas as a transition fuel.


What’s missing is the role played by Victoria’s Premier Daniel Andrews. The only party offering any indication is EnergyAustralia’s parent, Hong Kong-based CLP Holdings, which notes the administration has agreed to “mechanisms” to keep Yallourn running until 2028, as well as “support” for the battery.

That might raise flags that the state is committing bucketloads of taxpayer money to a keep a private company afloat.

The state needs to ensure energy security, and Yallourn provides around a fifth of Victoria’s electricity. But the almost 50-year-old plant is unreliable, breaking down 50 times since 2018 and costing EnergyAustralia up to A$300 million ($230 million) a year for its upkeep, equivalent to 80% of its 2020 operating profit. Plummeting wholesale prices, in part thanks to the growth in renewables, are also making it increasingly uneconomic to run. And some 5,000 MW of green-energy projects in the works won’t be online for several years.


Web News Observer has learned that any financial outlays from the government are part of a risk-sharing agreement that should minimise, if not eliminate, the cost to the public. That they have found a way to give EnergyAustralia income security in a cost-effective manner should be something for Tanna and Andrews to crow about – in more detail.

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