The Prime Minister and I have been having a stoush in the Parliament about whether the Liddell power station should close in five or ten years.
Last year the Hunter’s miners sent 161 million tonnes of coal (92 per cent of our output) to our export markets.
They also sent around six million tonnes (4 per cent) to the Liddell power station and they’ll continue to do so for another five years.
A similar amount of coal fed the neighbouring Bayswater power station and I am determined to make sure that continues for at least another fifteen years.
When Liddell eventually closes, the coal it now burns will be exported to markets where it will secure a higher price.
The coal companies are obligated to send coal to our power stations where they receive less for it. Our coal industry will be strong for many decades to come.
What this all tells us is that the Prime Minister’s attempt to link the inevitable Liddell closure to the fortunes of the Hunter’s coal mining industry is misleading.
So too is the idea that he can fix the immediate energy crisis of his making, by extending the life of a rapidly deteriorating generator by five years.
Worse, I believe the Prime Minister knows that running Liddell for another five years beyond 2022 is not physically possible. Not at least without the injection of up to $1 billion worth of plant upgrades. That's also one of the reasons it's not financially viable.
Anyone trying to argue otherwise could only hope to mount an economic case (for keeping the plant open for another ten years) by factoring in continuing high household electricity prices, the very thing we want to avoid.
Interestingly, those trying to argue Liddell can run to the age of 55, come from the same political party as Barry O’Farrell and Mike Baird. You remember them; they dumped the former Labor NSW Government’s plans to upgrade Bayswater and Liddell and instead, sold them to AGL for a song.
In the last four years seven coal-fired power stations around the country have closed. It’s nobody’s fault; they were all commercial decisions largely based on age.
Ironically, this actually presents an opportunity for AGL, the Hunter’s economy and our power workers.
The decline in electricity generation capacity has to be filled and AGL is well-placed and willing to fill it, right here in the Upper Hunter.
They hope to do so by using their current position and assets to build a mix of gas, pumped-hydro and large-scale solar generators. They also plan to build significant battery storage.
They are ready to commit up to $2 billion for new generators and I am determined to ensure that the lion’s share is spent here.
Of course these projects will allow the Hunter to remain the power-house of NSW and generate electricity in a cleaner way not for five years, but for the next fifty years. It’s also the best plan for retaining and growing jobs.
I am also talking with AGL about transferring workers who don’t want to take a redundancy from Liddell to Bayswater as others leave the workforce there, over the course of the next five years.
Are there any threats to the plan for a new energy hub? Yes, Malcolm Turnbull’s interference, his offers of false hope, and his failure to provide investment certainty by producing an energy policy.