The State Government has launched a review of coal development programs and new coal policy after a Latrobe Valley demonstration project was withdrawn.
Shanghai Electric Australia Power and Energy Development was awarded $25 million in joint funding from the state and federal governments to develop a $119 million demonstration plant at AGL’s Loy Yang power station with a view to produce briquettes for export to China to fuel a power station in Shanghai.
A State Government statement said the company was unable to develop the project due to a lack of market demand. A government spokesperson said the company had not received the funding because it failed to meet milestones set, which included attracting private investment.
The project came under the joint federal and state Advanced Lignite Demonstration Program, of which there are two other Valley projects to develop plants at Yallourn Power Station: one to produce a range of products including pulverised injection coal, the other to create synthetic crude oil.
The spokesperson said these remaining projects were still “tracking along”.
The government statement yesterday said while Victoria had the second largest brown coal deposit in the world, major energy companies including AGL, GDF Suez and Origin Energy had already announced publicly they would not be investing in new coal-fired power stations.
“This independent review will ensure there is a strong decision making framework around coal projects so that the community and industry can have confidence and certainty into the future,” Energy and Resources Minister Lily D’Ambrosio said.
“Previous governments have supported coal-related programs with limited success. Any future support for new coal technologies must be based on their viability and benefits.”
Opposition spokesperson for Energy, Resources and Renewables David Southwick questioned whether the move was part of a plan to shut down Victoria’s coal industry.
“We support a mixture of energy sources, including renewables and coal, but Daniel Andrews must explain if he is trying to pull the plug on Victoria’s cheaper energy resource and the thousands of jobs it supports,” Mr Southwick said.
Environment Victoria welcomed Labor’s decision and called for the $25 million to now be reserved for non-coal opportunities in the Valley.
“For too long we’ve thrown good money after bad pursuing polluting pipedreams in the Latrobe Valley,” Environment Victoria’s Safe Climate campaign manager Dr Nicholas Aberle said.
Rhys Edwards from RDME Consulting has been appointed to lead the government’s review. The findings will feed into the government’s new coal policy, which will be released in 2016.
For more coverage, read Monday’s Express.