NSW is considering the closure of coal fired power plants on the back of the Federal Government’s plan to pay some power stations to shut down.
Under the new carbon tax, it has ‘contracts for closure’ that could results in the shut down of up to 2000 megawatts of coal fired power generators, according to the Herald.
Likely targets for the paid closure are the power stations at Lake Munmorah on the Central Coast and Liddell power station near Muswellbrook, as they are the oldest and highest polluting in the state.
The combined greenhouse gas emissions from these two power stations are approximately eight million tonnes annually.
The coal fired power stations at Hazelwood in Victoria and Playford at Port August in South Australia have registered interest in the Federal initiative.
Resources and energy minister Martin Ferguson has also highlighted these two plants under the closure scheme.
When asked if the Munmorah power station would be paid to close, NSW premier Barry O’Farrell told the Herald he was “getting advice from the Treasury. Broadly, the carbon tax is not good for NSW”.
“It will affect jobs, it will push prices up and whilst the compensation package announced is a one off, what we know about carbon tax is that it will continue to increase.”
The tax was roundly slammed by the mining industry yesterday, with Rio Tinto labelling it unfair and saying it will put Australia at an investment disadvantage.
The executive director of the Australian Coal Association, Ralph Hillman also said the $23-per-tonne carbon tax will not reduce greenhouse has emissions, but will put thousands of people out of work and damage Australia’s economic growth.
As the carbon tax is planned to systematically increase from $23 per tonne in the first year up to $25.40 by the third year, many are predicting hard times ahead for coal fired power stations.
While the Federal Government plans do not exclude the construction of new coal fired power station, Treasury modelling for the Carbon Tax assumes that natural gas and renewable energies such as solar, geothermal and wind power will make up the majority of the power shortfall.