Slammed by the IEEFA as not making sense, the Government appears determined to spend $610 million of public money on the Kurri Kurri gas-fired power generator in the Hunter Valley, announced this week.
And it’s not the only one. Energy Australia has been given $83 million for the Tallawarra B gas plant near Wollongong in NSW to cover 1/4 the cost. The billionaire, Andrew Forrest also got $30 million for a plant in Wollongong. In all it’s $723 million for 1,700 megawatts of gas-fired power that’s largely useless – a stranded asset. Here’s why:
- The Kurri Kurri gas plant is expected to run for less than 2% of the time
- For the first 6 months it will run on diesel
- Snowy Hydro already has a gas peaking plant just south of Newcastle – a plant that is currently used for just 0.9% of the time.
- The Energy Regulator reported that in the first 3 months of this year gas-powered generation declined by 42% – it’s just no longer economic
The economics, the science and common sense say this is wasteful and wilfully wrong. Grid-scale batteries are cheaper, quicker to build.
The Institute for Energy Economics and Financial Analysis says technology will determine the fate of gas
All of the large, proposed battery projects have land and connection points to the grid making their realisation more likely.
In the short term, big grid-scale batteries will not entirely replace gas. They will however take the cream out of the market and crimp gas’ profitability and usage.
For this reason it is highly unlikely that the private sector will build gas-fired plants. That and government pig-headedness on anything renewable is no doubt behind this huge waste of public money.
The International Energy Agency forecasts that demand for gas globally will decline by 5% every year during the 2030s and LNG exports will fall by 60% between 2020 and 2050. Time to plan for what’s actually happening.