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Transcript of interview with Chris Smith: 2GB: 27 March 2017: coal-fired power stations; energy policy

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Senator the Hon. Matt Canavan Minister for Resources and Northern Australia



Subjects: coal-fired power stations; energy policy

CHRIS SMITH: Well it looks like the Government's sticking to its promise that clean coal will retain a key role in the national energy mix. We're hearing today that they've begun talks with Asian investors to build a coal-fired power station which would be backed by the $5 billion Northern Australia fund. The money is all there ready to go. And this comes as a Newspoll shows 47 per cent of voters support the use of Federal Government funds to construct the station, with 13 per cent undecided.

Now, I've spoken on this program about the plants that are being used in countries like China, Japan, the technology coming forward in the US. They're called supercritical or ultra-supercritical plants, and that's where the future of coal lies. Some, of course, are fervent ‘coalophobes’ and won't ever concede to a cleaner coal energy landscape. But let's take a look at what may happen and how serious the Government is about securing our energy future. Federal Resources Minister Matt Canavan is on the line right now. Minister, thank you very much for your time.

MINISTER CANAVAN: Hi Chris, how are you mate?

CHRIS SMITH: I'm very, very well. You know, I often say that if we can't rely on our electricity, if we can't rely on power, business is up you-know-where creek, retailers are probably thinking to themselves why am I paying such exorbitant amounts for electricity when I can't get the service reliably in my home or in my small business? The number one priority has to be reliability of energy sources, surely?

MINISTER CANAVAN: Well that's right, Chris. I mean, electricity prices are already too high for people and businesses around Australia. We've today asked the ACCC to look at that and see if there's enough competition in the market. But one recipe for having even higher prices would be to turn our backs on the cheapest form of power, which is coal-fired power. And we're lucky enough in this country to have abundant sources of high quality coal. Many countries in the world use our coal to establish their own industries and provide cheap power to their people, and it would just be crazy for us to turn our back on that very same resource.


But you know that we're surrounded by ‘coalophobes’ who won't ever concede to a cleaner coal energy landscape. You can do all you want in storing carbon, in creating less CO2 emissions from a new coal-fired power station, but they won't buy it will they?

MINISTER CANAVAN: Well it's really disappointing to me that even the Labor Party have turned their back on coal lately. Last week they voted for a Greens motion in the Senate saying that coal had no future. This is the same party that purports to represent thousands of people that work in the coal mining sector and the coal-fired power sector. Those people are good hard-working Australians, that are often members of trade unions, and then their political masters in the Labor Party turn around and do deals with the Greens down here in Canberra. I don't think they'd be too happy with that because I think the thousands of people that rely on coal for their incomes and livelihoods would like us to stand up for them and represent them. I live in Central Queensland, it's a big coal-producing area, and I'm going to do my best to fight and stand up for the people I represent, and also sell the benefits of how our coal does a great job in producing wealth right around the world.

CHRIS SMITH: Now, you've just come back from Japan, I understand, where 70 per cent of coal-powered energy comes from these supercritical or ultra-supercritical plants. Is the technology feasible for a site in Queensland?

MINISTER CANAVAN: Well it's off-the-shelf technology, the ultra-supercritical plants. There's a number of them in Japan and there's hundreds of them being built around our region. It's definitely feasible. There was an engineering study by a respected firm, GHD, a few years ago which showed that an 800 megawatt coal-fired power station could be commercially viable in North Queensland. North Queensland doesn't have a baseload power station north of Rockhampton, and there's a lot of area north of Rockhampton. So we need to look at those solutions for that part of the world. A lot of minerals, a lot of energy resources that we could mix together to create a strong metals manufacturing industry, and that's what we need to focus on to provide jobs for all Australians.

CHRIS SMITH: But after looking and checking them out, after checking out what's available, as you say, off-the-shelf, they're more efficient, cleaner?

MINISTER CANAVAN: Yeah, so they're about- our coal-fired power stations are about 30 per cent more energy inefficient, so we'd save around 30 per cent in carbon emission terms, but also save on operational costs as well. They do cost a little bit more to build, but overall they come out at the same cost or cheaper than the older coal-fired power stations that we have right now.

CHRIS SMITH: You've got potential investors?

MINISTER CANAVAN: Well there are people that are very interested. There are people who are interested in selling their technology and there are people that are interested in adopting it and owning a station here. They're not only from Asia, there are some Australian investors interested too, so they're the people we're talking to over the next couple of months. It's obviously a big project to build a coal-fired power station and we need to get it right. So we need to have more of those discussions and get the

details right and the environment right for people to invest in our country and provide reliable electricity at a cheap price.

CHRIS SMITH: But you could complement that investment by supplying funds from the Northern Australia fund, right? Which is what it was meant for.

MINISTER CANAVAN: Yeah, that's right. I mean, I think people expect Governments to be funding basic infrastructure around Australia. That's why we established this Northern Australia Infrastructure Facility, which is effectively a development bank, if you like, to build infrastructure in the North and try and drive our growth. So, most of your listeners would be in Sydney, but we just don't want everybody moving to Sydney. We need to develop other areas of our country to take the pressure off Sydney. And so there's a lot of potential in the North. So this fund is not just for energy, it's for railway lines, ports, and there are about five projects that are close to being finalised at the moment. But we do need to look at the energy circumstances up there in the North as well.

CHRIS SMITH: Okay. It's all good news. How soon could we have a coal-fired power station - a new one - operating in this country?

MINISTER CANAVAN: They reckon about three years, Chris, is the time from go to whoa. They're obviously large projects, take a bit of time to build, and depending on the circumstances, the design we want, it could be a little bit less or more than that.

CHRIS SMITH: Okay. Thank you very much for letting us in on all of that.

MINISTER CANAVAN: Cheers Chris, have a good day.

CHRIS SMITH: Appreciate that. Federal Resources Minister Matt Canavan.