The burning of coal is the single biggest contributor to our rapidly heating planet. Advice from the Bureau of Meteorology says that under current emissions pledges in the Paris Agreement, the world is on track for 3.4 degrees of warming.
But the implications for Australia are far worse, with the Bureau saying we are facing up to 4.4 degrees above pre-industrial levels. This means we are on track for a world that is completely unrecognisable to the one we live in today.
Without a plan for coal, there is no plan to address global heating. In any long‑term plan to decarbonise our economy, the very first step required to get the climate crisis under control is to stop all new coal, oil and gas projects—and that includes financing extensions or upgrades of existing plants.
Australia's coal fleet is very old, increasingly unreliable and the largest source of Australia's emissions. Coal is facing increasing financial pressure from clean energy which is the cheapest form of new energy generation and backed by global capital. These market trends are driving a structural—not cyclical—decline in coal.
The energy and finance markets have already realised that new coal projects, or even merely prolonging coal in the system for longer, contains so many financial risks that no private finance is willing to put their money into new or upgraded coal generation for Australia.
The only actor willing to provide funding to coal plants in Australia is the government which has little regard for incurring economic losses in propping up coal and even less regard for the deteriorating state of the climate.
This bill would prohibit the Commonwealth from funding the refurbishment, building, purchasing or assisting in the transfer of ownership of a coal-fired power station.
In light of the government's Underwriting New Generation Investment (UNGI) scheme and the shortlisting of Vales Point coal station, owned and operated by a major Liberal Party donor, this bill should be passed to prevent the maladministration of grant schemes, as has recently been exposed by the Auditor General in relation to the 'SportsRorts' scandal.
This government has shown no reluctance to divert public funds for political purposes, including to its political allies in the coal, oil and gas industry who provide significant donations and job opportunities to former Ministers and their staff.
The history of the Vales Point power station is instructive of the close relationship between politicians and donors and why this bill is so important to prevent the misallocation of public funds for private enrichment.
In 2015, the NSW Liberal State Government sold the Vales Point power station to Mr Trevor St Baker's company, Sunset Power International for just $1 million. Two years later it was valued at $730 million dollars and personal dividends of $40 million were paid by the company after share buy-backs boosted the value of the company further.
The public reason given by the Liberal State Government for why this state‑owned generator was sold for $1 million—cheaper than many Central Coast homes surrounding the power plant—was because of site remediation costs. Apparently, selling Vales Point would rescue the taxpayer from 'ongoing losses' and exposure 'to significant liabilities, such as costs associated with decommissioning, estimated to be in the tens of millions', then Treasurer Gladys Berejiklian claimed.
However, it was later revealed through documents forced to be tabled in the NSW Legislative Council, that the NSW Government retained financial responsibility for decommissioning the site and is exposed to 'unquantifiable liabilities', while the contribution of Delta Electricity will be limited to just $10 million for a clean-up bill that will likely exceed $100 million.
Now under the UNGI scheme, more taxpayer money is being made available by a Liberal government and Mr St Baker's company was quick to submit a request for more public financial support.
Since the announcement of the UNGI scheme, Mr St Baker's financial vehicles disclosed donations to the Australian Electoral Commission of at least $44,000 to the Liberal and National parties.
Then in February 2020, it was reported by News Corporation that the owner of the Vales Point power station, Mr St Baker, was given assurances he was going to receive $11 million in funding for an upgrade to turbines and high pressure heaters.
When Senator Larissa Waters asked the Department of Industry, Science, Energy and Resources in Senate Estimates about the Daily Telegraph announcing Mr St Baker's successful application, the Department distanced itself from any decision:
Senator WATERS:…Has the department advised Mr St Baker that perhaps he can be excited about his chances or something?
Mr Sullivan: No.
Senator WATERS: When is the time frame for the announcement?
Ms Parry: There is no time frame for the announcement yet. That's still being considered by a government.
Senator WATERS: So Mr St Baker has totally jumped the gun?
Ms Parry: I can't comment on Mr St Baker's time frames or otherwise.
So if the information leaked to News Corporation and Mr St Baker didn't come from the Department, it likely came from a Cabinet Minister who was aware of the progress of the decision to award Delta Electricity $11 million.
This indicates a very close relationship between Mr St Baker and senior members of the Liberal Party.
Preliminary calculations by energy analyst, Tristan Edis indicate that Delta Electricity's $9 million contribution to the turbine upgrade will have made its money back within two years. Millions in increased profits will then accumulate to Delta Electricity until its updated scheduled retirement date of 2049.
This upgrade, contingent on public finance, would be extremely profitable for Mr St Baker's company, but disastrous for our climate and a risk to our energy network as we prolong reliance on older, less reliable generation.
As it was revealed in Senate Estimates in contradiction to the News Corporation story, no formal decision has yet been made on the grant. So it is of critical importance to ensure this legislation passes before public funding is granted to a private coal company with a close personal and financial relationship with senior Ministers of the Liberal and National Parties.
The bill should be passed without amendment.
Senator Sarah Hanson-Young