Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I read with interest an article in The New York Times earlier this week that talked about Japan building 22 new coal-fired power stations in 17 locations over the next five years. I also read an article reporting that the CSIRO and the Energy Market Operator had said that renewables were now much cheaper than coal. I thought: how is it possible that Japan could pay the additional premiums to import Australian coal all the way to Japan and still have lower costs? Why would they be building all these coal-fired power stations? So I went to the actual study that the CSIRO did, to look at what parameters they used to come up with that conclusion. Surprise, surprise, they looked at the life span of a coal-fired power plant at just 25 years. Everyone in the industry clearly knows that the design life of a coal-fired power station is 50 years. If you're going to do your costings and you only allow 25 years, you're going to amplify the cost of that coal-fired power station. Sadly, that's exactly what the CSIRO have done to come up with a completely erroneous conclusion in this report.

But it actually gets worse. When you look at the capacity factors, yes, there are heroic capacity factors for solar and wind, but they've made no allowance whatsoever for the degradation of the solar PV cells. All the studies, all the science and all the research tells us these decay at between half a per cent and one per cent every year. So, whatever capacity factor you start off with, you would have to decline that over the 25 years, yet this study has made no allowance for that whatsoever. Then, when it came to the back-up, they said: 'It's lower cost with back-up.' The back-up they've allowed for is only two hours with battery and six hours with pumped hydro. What happens after that? If you're going to make an apples-for-apples comparison, you must compare like with like. You cannot just allow two hours of battery back-up. You have to make an allowance for the worst-case-possible scenario, and that's what they've refused to do.

Finally, of course there's no consideration of the additional cost of extra transmission lines. So what we have are a completely erroneous study and completely wrong parameters, and we have that being repeated over and over in the media in our society today. Is it any wonder that we are where we are and that we've seen electricity prices rise to the extent they have, despite the good work of the minister getting them down over recent years? (Time expired)