Australia’s Coal State Reverses Plan to Close Power Plants
(Bloomberg) -- Queensland, the Australian state that exports about one-eighth of the world’s coal, has said it plans to keep its power stations that burn the fossil fuel open for longer, threatening the nation’s ambitious goal to more than double renewable generation by the end of the decade.
The former government’s “ideological decision to close coal units by 2035, regardless of their condition, is officially abolished,” Queensland Treasurer David Janetzki said in a statement. “Queensland’s coal-fired fleet is the youngest in the country and state-owned coal generators will continue to operate for as long as they are needed in the system and supported by the market.”
The move comes as global coal consumption rises to a record year after year, despite efforts to boost deployment of renewables and curb emissions. US President Donald Trump has led a push to prop up the industry, while other major polluters such as China and India also continue to dig up more of the dirtiest fossil fuel.
Queensland is pledging A$1.6 billion ($1.1 billion) over the next five years into state-owned coal, hydro and gas power plants to keep the assets open for longer, according to an energy roadmap released by its government on Friday. Running coal assets to their technical life rather than closing them early would reduce system investment costs by about A$26 billion to 2035, it said.
However, the plan sends “uncertain signals for future investment in Queensland’s clean energy supply” and imperils Australia’s goal to reduce emissions between 62% and 70% on 2005 levels by 2035, said BloombergNEF analyst Sahaj Sood.
Queensland has been hard-hit by the effects of climate change in recent years, including more frequent cyclones and floods, along with heat-induced bleaching of the iconic Great Barrier Reef.
The roadmap also attracted criticism from climate groups, including WWF’s Australian branch, which described it as “short-sighted.”
“This is a roadmap to more fires, floods and heat waves, and more mass-bleaching events,” Chief Regenerative Officer Nicole Forrester said in a statement.
Coal is a significant part of Queensland’s economy. The state exported A$45.8 billion of the metal-making and power-station fuel in the year through May and earned A$5.5 billion of royalties in the financial year through June. However, miners including BHP Group Ltd. and Anglo American Plc last month announced closures, citing lower prices and rising costs, including higher royalties.
Rio Tinto Plc said earlier this month that the venture that owns the state’s biggest power plant may close it in 2029, six years earlier than previously announced. State-owned companies operate all but one of the remaining seven coal fired plants, and earlier this year Queensland said it would extend one of them — threatening a pledge by the previous administration to end generation using the fuel by 2035.
Queensland is one of Australia’s most coal-dependent states — generating 65% of its electricity needs in 2024 from the fuel, according to BloombergNEF. The state’s Liberal National Party won office last year after running on a platform to repeal the previous Labor government’s commitment to end reliance on state-owned coal-fired power and achieve 80% renewable energy penetration by 2035.
The state will also add as much as 6.8 gigawatts of new wind and solar projects, 0.6 gigawatts of gas generation and 3.8 gigawatts of storage by 2030, the Queensland government said.
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