The Financial Times reported this month that China is building more coal fired power stations than it has in ten years.

In fact, China is building more coal fired power stations than any other country in the world and accounted for 93 per cent of the world’s new coal power construction in 2024.

This is all while politicians like Energy Minister Chris Bowen claim that “renewables remain the cheapest form of energy”.

But why is China building so many coal fired power stations when Australian elites constantly tell us that solar and wind is so cheap?

The problem is that Chris Bowen relies on reports that do not examine the actual cost of building coal, gas or renewable power stations in the recent past. Instead, his reports commission consultants to estimate what the cost would be in the future.

Australian economist Gene Tunny and researcher Gerard Holland, both with the Alliance for Responsible Citizenship, have looked at the facts and they have come to a very different conclusion.

Their numbers show that coal is the cheapest form of power. In round numbers, the cost of building a coal fired power plant (of 1000 megawatts) is $1.5 billion compared to an average cost of $11 billion for a renewables-based system.

So, a coal fired power station is almost a tenth of the cost of renewables on a capital cost basis. And, after considering fuel costs, coal fired power delivers wholesale power prices of $50 to $100 per megawatt hour, half of that of renewables.

Aluminium smelters need an energy price of less than $60 per megawatt hour to stay in business. Without coal, Australian aluminium jobs will be lost or only saved through massive taxpayer subsidies.

All of this is not to argue that we should only produce one type of power. What is cheapest on paper will not always be the best solution in all situations.

Some customers will pay a premium for lower emission nuclear energy, like data centres.

Renewables will have applications too, such as in areas where reliable power is not critical, or in remote areas disconnected from the national energy grid.

Things become misguided, however, when the rich people that can afford this green energy surcharge force poor people to pay it too. That is why the new US Energy Secretary told the Alliance for Responsible Citizenship conference that net zero is a “sinister” goal.

Like Europe, we have shut our coal fired power stations pushing our power prices towards European levels.

But Australia has achieved this feat while simultaneously exporting the same coal and gas we used to use to China and other countries that compete with us for manufacturing jobs. We then buy back the things that China makes with our coal (like solar panels) just to further entrench our energy poverty and dependence.

The good news for Australia is that we have the resources to dig ourselves out of this energy hole. That same coal we export to China, we can use ourselves. Our coal does not get cleaned on the boat over, so a coal fired power plant here rather than China makes no difference to the world’s environment.

So with China building two coal fired power stations a week, Australia can build a few for ourselves. That would not blow up the planet but with the facts showing that coal is the cheapest, new Australian coal power stations would bring our power prices down and save Australian manufacturing jobs.

All it takes is to return from the land of make believe to the real world.

Hon Matt Canavan

Senator for QLD