John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for Resources and Energy, Senator Sherry. Is the minister aware that during the 1990s the former State Electricity Commission of Victoria, as a partner in Herman Research Laboratories, developed a coal gasification process that is 40 per cent more efficient, significantly reduces emissions and was proposed to be deployed in a replacement power station and to retrofit existing power stations in the Latrobe Valley?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

Thank you for your question, Senator Madigan. You have asked the correct minister, but obviously in my representative capacity I am not particularly familiar with day-to-day developments in generation technology. I have sought advice, thanks to your kindly notifying my office of the issues on the question.

The technology you refer to was selected for grant support under the Low Emissions Technology Demonstration Fund, which was a fund under the Howard government. The technology is referred to as 'integrated drying and gasification combined cycle'. As your question indicates, it is proposed that the technology will process Victorian brown coal, removing the high levels of moisture found in that resource to convert the drier coal into a synthetic gas, which is used to fire gas turbines. Together with a steam turbine stage, the process represents a more efficient utilisation of brown coal fuel with lower greenhouse gas emissions than is currently the case with conventional brown coal power stations.

However, I am advised that, as with all technology development—solar thermal, for example—it can be challenging to make technical progress and apply it in practice. The HRL project to which you refer is dual gas; it also uses a cleaner natural gas fuel as well as the synthetic gas. It has received conditional support from both the Victorian and the Australian government. In fact, the Howard government committed some $100 million to this project. The funds are appropriately tied to the project's meeting its milestones, and progress is being monitored by the department. The government is awaiting the outcomes of the project development and appeals in the Victorian Civil and Administrative Tribunal.

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Would the minister be prepared to support the development of a new coal gasification power station at Driffield using this technology to replace the ageing Hazelwood power station?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

The Australian government does have an agreement in place with Dual Gas to provide, as I mentioned, funding of some $100 million committed to by the Howard government for the development of this technology if certain conditions are met. In terms of closure of power stations, the government's Contract for Closure Program is currently underway, which may result in some capacity closure in the Latrobe Valley. However, the outcome of this program will not be known for a period of time.

More generally, particularly in respect to your supplementary question about where future investment may be located, I would reiterate that it is not up to the Commonwealth government to determine where investment is delivered. That is up to the private sector. They make the investment decisions.

The government continues to work with the Victorian government to develop low-emissions coal technology in the Latrobe Valley through the Carbon Capture and Storage Flagships Program. The Carbon Net project is investigating the potential of capturing carbon dioxide— (Time expired)

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Would the government support the state government in Victoria in the recommissioning of the SECV to continue their development of a new power station and technology that has sadly been missing since the failed privatisation of the power industry in that state by the former Kennett government?

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

The government recognises the importance of competitive and sustainable energy markets. We are therefore of the view that the private sector is best placed to make investment decisions around new power generation investments, not the government. That is why we have established a national energy market that is recognised by the International Energy Agency as one of the most efficient markets in the world. As I have mentioned, the former Howard government provided some $100 million for the low-emissions technology development. This government has continued oversight of that particular proposal, subject to meeting the various conditions.

The National Energy Market is highly competitive. It is delivering efficient outcomes to consumers, particularly in Victoria. In terms of supporting new technologies the government provides assistance through comparative merit programs, which ensure— (Time expired)