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Monday, 13 February 2012
Page: 984


Mr BANDT (Melbourne) (11:58): We are facing a severe threat from climate change. That is why the Greens have pushed so hard to cut pollution and make clean energy cheaper. It is why we have worked with the government to bring about the clean energy package, including a price on pollution and $13 billion for clean and renewable energy. It is why we will continue to work hard to prevent the building of any new coal fired power stations in this country. So we are appalled by the latest decision of the government to extend to HRL Limited a further extension of time on meeting conditions for a $100 million grant offered to the company by the Howard government. Building a new coal power station while trying to cut pollution is an incredible case of putting your foot on the accelerator and the brake at the same time.

In 2007, HRL was awarded $100 million, under the Low Emissions Technology Demonstration Fund, for their $750 million 400 megawatt power station despite strong concerns about its economic and technical risks from the expert panel reviewing the grant. In fact, the expert panel reviewing HRL's application put HRL in the category of 'not recommended for funding'. HRL actually wanted more than the $100 million but the Commonwealth would not give it to them, which is why a Victorian government grant then emerged. The 400 megawatt power station was supposed to be up and running by 2009. Clearly, it was not. In 2009, HRL's joint venture partner, Chinese company Harbin, pulled out of the project. Harbin were providing $500 million to it. In Senate estimates, the department of energy has acknowledged that HRL have been given an extension on at least three occasions. In 2010, HRL emerged as a 600-megawatt project. But again the federal and state grants continued to be offered. Last year, HRL was set a deadline of 31 December 2011 to meet the conditions of their grants. This date was confirmed by the Prime Minister. Now the government has given them a further six months extension on meeting those conditions.

Yet at the same time, last week, the minister, the member for Batman and the Minister for Resources and Energy, cut a grant to the Moree solar farm project, which failed to meet a milestone on a grant that they have held for the past eight months. Eight months and one milestone missed versus five years and missed deadlines all over the place. Yet the Moree project got the chop while more money was made available for coal fired power stations. The member for Batman, the minister, Martin Ferguson, is proving to be a minister for the 20th century and showing his real priorities. He would rather prop up a serially failing company trying to build a coal power station than support a solar farm.

There are serious questions about the economic viability of this proposal. Even if it could get off the ground, it would only reduce brown coal emissions to the intensity of a black coal power station in New South Wales. It risks entrenching the continued burning of brown coal when it should be replaced with renewable energy. I know that some of the members who follow me may say that the extension has been given because of a VCAT case. But that does not stack up. When the deadline was first set, it was clear that HRL's partial EPA works approval was already going to court and would hold up the project for months. Secondly, the legal approval was just one of three conditions that HRL had to meet. As of October last year, we know that they had not met any of them.

The costs of the HRL project have increased from $750 million to $1.3 billion. However, as delays in executing HRL's contract with the China National Electric Equipment Corporation to build the plant equipment will increase the project's cost it is fair to assume that somewhere in the order of $1.5 billion is reasonable now.

The scientists on the Climate Commission have told us that, if we are to have a better than even chance of defeating runaway climate change, countries like Australia need to decarbonise our economy by 2040 at the latest. That means very simply moving as quickly as we possibly can to having this country powered by renewable energy. To potentially offer a company $100 million to build a new coal fired power station at a time when the Treasury modelling of the climate package says that no new commercial coal fired power stations can be built is putting one's feet on the accelerator and the brake at the same time. That is climate change madness.