The world is dividing into two groups of countries, those building cheap, modern, clean coal fired power stations, and those destroying coal fired power stations. Whether it is a coincidence or not, those building coal fired power stations have the cheapest power.
This month Germany celebrated the blowing up of a 6-year-old coal fired power plant. The Moorburg coal fired power plant cost $5 billion to build and operated from 2015 to 2021. In their mad pursuit to change the temperature of the globe, German leaders decided to commit the economic equivalent of a kamikaze mission on their own country.
Last year Germany’s Defence Minister said that war with Russia could occur in the next 5 years. It is not clear how they are preparing for that by blowing up a power station which makes Germany more dependent on Russian gas.
It is the same story in the UK which celebrates the ending of all coal fired power on the island that began the industrial revolution. In a real-world demonstration of the rule, play stupid games, win stupid prizes, the UK now has the highest power prices in the world, and it can no longer even make steel.
Meanwhile, Russia’s most important backer, China, is building more coal fired power stations than it has for 9 years. China has more than 130 coal fired power stations in construction. There are just 18 left in Australia. The cheap power that these Chinese stations deliver has allowed China to capture a 60 per cent market share in the world’s most important commodities, like steel, copper and rare earths.
India’s another country with a fast-growing manufacturing sector fuelled by the expansion of coal. This month India reached its target to produce 1 billion tonnes of coal in a year becoming only the second country in history to do this. President Modi’s Government described it as a “historic milestone”.
Electricity prices in the United Kingdom are about four to five times higher than those in China and India.
While China and India have long been building coal fired power stations, other countries are now joining the club. President Trump announced this month that the US would start producing energy again with, in his words, “beautiful, clean coal”.
Trump is getting unexpected support from Labor State Governments in Australia. Last year, the NSW Government announced that it would pay to extend the life of its largest coal fired power plant. And just moments after Trump tweeted his support for coal, news broke that the Victorian Government was looking to make similar payments to keep the Yallourn coal fired power station going.
These “stay open” payments will cost billions of dollars and it would be cheaper just to build a new coal fired power station rather than prop up the ageing ones that are regularly breaking down. When China is building 130 coal fired power stations, building a few here in Australia will not blow the planet up.
What people are working out is that you cannot run a modern, industrial economy without coal fired power.
Unfortunately, the Federal Labor Government is yet to get the memo. Their budget doubled down on wasteful subsidies for unproven hydrogen energy solutions. Eight major Australian hydrogen projects have gone belly up over the past year. Investing in economic fairytales will not lower the price of power for Australians.
We have to decide which club Australia should join. Do we take the European path of high power prices and deindustrialisation, or do we use the same resources we ship overseas to bring down power prices here at home? We will not save our manufacturing industry unless we join the coal club with so many other countries.
Hon Matt Canavan
Senator for QLD
