The Australian newspaper exclusive interview with Shine Energy "Indigenous generator seeks carbon promise".
The indigenous-owned company proposing a new 1000 megawatt “clean” coal plant in north Queensland says it must be protected from a future carbon price to attract investment and has launched talks with the government to indemnify the project against “carbon risk”.
A day after Scott Morrison announced a “feasibility analysis” for the $2 billion Collinsville coal-fired power station, Shine Energy chief executive Ashley Dodd said itwas imperative “that we secure the guarantees from the federal government to protect us from any future legislative changes around carbon prices”.
Mr Dodd said the proposed Dhalgan Energy Park would provide new economic opportunities for thousands of traditional landowners, with a plan to ensure at least 10 per cent of the 2600 direct jobs generated by the project went to the people of the Birri nation and that it provided a pathway to “economic self-determination”.
The push for a carbon guarantee will inflame the political row over coal, with Labor strongly opposed to any government move to shelter new coal plants from the risk of a future carbon price.
Opposition energy spokesman Mark Butler yesterday criticised the feasibility study into the Collinsville project — in the marginal Coalition seat of Capricornia — saying the government appeared “willing to have taxpayers pay any price for their obsession around new coal power”.
Shine Energy’s profits from the new project would be reinvested in efforts to improve educational and training outcomes for indigenous Australians, including a new research centre in Collinsville that would be geared around advancing STEM (science, technology, engineering and mathematics) outcomes.
The proposed project has received the initial backing of resources giant Glencore which said it would provide Shine Energy with “project management and governance expertise during the feasibility phase of the project”.
Mr Dodd yesterday said the company would pressure the big four banks to “honour their reconciliation action plans where they have said they will do everything in their power to close the gap”.
“They have to honour those words with action. They have to support a traditional owner company that is leading the way from the old fossil fuel energy types … making sure that the transition happens in a stable way that does not put the national energy market at risk.”
The Australian has also confirmed the proposed project is a “hybrid” and would couple a new ultra-supercritical coal plant with a solar PV farm, create 2000 jobs over the construction phase and 600 permanent jobs in the operation and maintenance stage.
Shine Energy says the new power station would help to lower Australia’s emissions profile by allowing for a swifter phase-out of other dirtier plants such as the NRG-operated Gladstone coal-fired power station in Queensland.
A business case was finalised by the company at the end of last year following a study conducted by engineering firm WSP.
Mr Dodd said the feasibility study announced by Mr Morrison this week would help the project reach financial close over the next 18 months, with a plan to have the plant operational in five years.
“This will create a pathway for the economic self-determination of the Birri nation. This is an opportunity for people to come back home. This is about us being in control of our own futures.”
Mr Dodd said initial estimates suggested the build would cost about $2bn and argued it was essential to ensure the project was indemnified against the risk of a future carbon price in order to provide investor confidence.
“That is being discussed. What it does is it sends a signal to the debt and equity markets that they have a safety net in a sense when they invest in this project,” he said.
Energy Minister Angus Taylor declined to comment on how the “banking” for the project could be achieved, but said the government had not ruled out underwriting the Shine Energy proposal once it was more advanced and if it proved to be economically viable.
“The purpose of doing the feasibility study is to get it to the point where it could be a candidate for underwriting in the future,” Mr Taylor said.
Michelle Landry, who holds the seat of Capricornia by a margin of 0.6 per cent, said the project would be “fantastic” for her constituents and backed any moves by the government to indemnify the plant against a future carbon price.
“This is something that would have a long life. So they want to protect that investment,” she said. “I think that part of getting this project off the ground is going to have to be geared around looking at protecting their investment and future profitability.”