The Queensland government has decided to scrap the state’s coal closure targets after Treasurer and energy minister David Janetzki was reportedly over-ruled by the premier’s office, under pressure from the party’s right wing.
The dumping of the previous Labor government’s coal closure targets – which aimed to close the five remaining state owned generators by 2035 – is the headline feature of the LNP’s new five year energy roadmap outlined by Janetzki at a luncheon event in Brisbane on Friday.
The other significant moves are the scaling back of the proposed Copperstring transmission link in the north-west, a deferral (and likely scrapping) of the Borumba pumped hydro project, and the creation of a $400 million investment fund for new projects, and support for more than 1 GW of new gas generation.
It is believed Janetzki was prepared to signal firm coal closure dates, even if they were pushed back from Labor’s timeline.
Instead the government has merely gone back to the “technical” life of the coal generators, with possible further extensions, which would mean that power stations – described as “ageing clunkers” by many energy experts – could remain on line until the late 2040s or even the early 2050s.
“Coal will remain part of the state’s generation mix for decades,” Janetzki said. “This is a sensible and pragmatic plan built on economics and engineering, not ideology.
“It will meet Queensland’s energy needs and is good news for tens of thousands of Queensland jobs, communities, the system and consumers – it also provides investment certainty to private sector gas and renewables investors.”
Investment certainty perhaps, but not much of an investment signal. And the new figures included in the roadmap signal an effective stop to new wind and solar projects over the next five years, beyond what is already committed, which I will explain below.
The decision has appalled environmental groups and worried renewable and storage developers, who count on a clear timeline for coal closures to judge the market opportunity for their investments. This opportunity is now pushed back by years, and the document is described as a roadblock rather than a roadmap.
“Clear and timely decisions on coal closures give investors the confidence to drive the energy transition,” said Marilyne Crestias, the head of policy and advocacy at CEIG, which represents large renewable investment companies.
“They are essential to unlock renewable and storage investment, cut emissions, and keep Queensland on track to meet its energy and climate targets.”
“Chaining Queensland to coal clunkers for 20 years is a bet against Queensland’s future,” Climate Council energy expert Greg Bourne said in a statement.
“It’s bad economics, bad for the climate, and bad for Queensland households. This is a reckless plan from a government that said it would cut climate pollution and lower costs.”
It’s also a potential blow to the federal government’s national target of reaching 82 per cent renewables by 2030, which counts on solid investment in new wind and solar in Queensland. And experts say it will lead to inevitable price hikes, given that coal and gas are not just dirty, they are also more expensive.
But it’s hardly a surprise, given that the LNP had already made clear its intention of scrapping Labor’s renewable targets – 50 per cent by 2030 and 80 per cent by 2035 – and had already cancelled two previously approved wind projects and called in others, and was triumphant in doing so.
Queensland is the most coal dependent state in the country – with a share of nearly 65 per cent over the last 12 months – and it is destined to remain so. Big industries, however, are nervous.
Rio Tinto, the biggest energy consumer in the state, has already flagged the early closure of the state’s biggest coal generator at Gladstone, and has written contracts for giant wind, solar and battery projects, arguing that its smelters and refineries in the city have no future if powered by fossil fuels.
Those projects are likely to form the bulk of the new capacity that Janetzki insists will still be built under the new energy roadmap. “We all know Queensland has some of the highest-quality wind and solar resources in the nation, if not the world,” Janetzki said. But under the new plan it will remain largely unexploited.
Janetzki says that there is currently 1 GW of wind and 3.2 GW of large scale solar fully operational in the state, and expects a further 6.8 GW of new wind and solar to be operating by 2030, and a further 4.4 GW by 2035.
Those 2030 predictions appear to include 1.6 GW of large wind projects already under construction and commissioning, including the state’s biggest, the partially complete 930 MW MacIntyre wind farm, the 420 MW Clarke Creek wind farm and the 252 MW Wanbo wind project.
Rio alone expects to deliver 3.5 GW of large scale wind and solar (and battery storage) for its Gladstone facilities, to replace the closing coal generator, and the federal government’s capacity Investment Scheme has awarded underwriting agreements to a further 1.9 GW of wind and solar projects.
So what Janetzki is signalling is an effective stop to most other wind and solar projects. On the other hand, he is forecasting 700 MW of new capacity in the south-east and a potential 400 MW of gas capacity in Gladstone – taking total gas capacity to 4.1 GW by 2030, and a further doubling to up to 8.3 GW by 2035.
The Labor government’s renewable energy targets will be scrapped, in a bill to be presented before Christmas, and renewable energy zones replace by “regional energy hubs”, which means they are not limited to wind, solar and storage.
Janetzki noted that 40 per cent of Queensland rooftop have PV, and confirmed the government will soon launch its “supercharged solar for renters” scheme.
He says Queensland will focus on smaller pumped hydro projects, and has relegated the proposed Borumba pumped hydro scheme to an “option”. He says he favours smaller pumped hydro to work alongside battery storage to store energy for use when demand is high.
This will be supported by a new $400 million Queensland Energy Investment Fund to be managed by QIC that will be used to support gas, small pumped hydro investigation and be “an open door” to all renewable investment proponents.
The main hope for new renewable energy projects could be in the north-west, and the construction of the Copperstring, which is being scale back from a 500 kV line to a 330 kV line, and cancelled some spur lines.
It is committed to the first stage of the project, the eastern link from Townsville to Hughenden, which Janetzki says could unlock $10 billion of new projects, after it is completed in 2032. A new regional hub is being created, which may account for much of the new capacity in the 2035 target.
As for the western link, from Hughenden to Mount Isa, no timeline was committed, although Janetzki has announced a $200 million to fund local renewable and storage microgrids to support proposed mining projects in the region.
Giles Parkinson is founder and editor-in-chief of Renew Economy, and founder and editor of its EV-focused sister site The Driven. He is the co-host of the weekly Energy Insiders Podcast. Giles has been a journalist for more than 40 years and is a former deputy editor of the Australian Financial Review. You can find him on LinkedIn and on Twitter.