Australia may still be dependent on coal-fired power stations at the end of the decade because of volatility in gas and carbon prices and a lack of infrastructure.
May still? Who are they trying to kid? Australia has a huge abundance of carbon reserves, mainly in the form of coal and we’ll be mining and using it probably for centuries to come. Probably after this global warming scare, the next and the one to come after that (greenies haven’t shown much imagination and we’ve already had warming; cooling and now warming again – cooling soon to come, I suppose).
In a report on Australia’s energy industry, American ratings agency Standard & Poor’s says gas-fired power stations are not being built quickly enough to replace coal due to the small number of investors in the market.
And S&P credit analyst Richard Creed says that if gas prices rise steeply there could be even less incentive to switch from coal.
“Even with the carbon price and a recontracting of black coal prices, it’s likely that coal-fired plants are going to be competitive with gas,” Mr Creed said.
“And really, in our view, for gas to substitute coal, gas needs to be more competitive than coal to provide the investment signal.”
As the Federal Government encourages the construction of power stations fired by gas and renewable energy such as wind and solar power, the report says the long-term price of carbon would have to rise significantly to encourage investment in cleaner technologies.
The carbon tax will be introduced in July with an initial price of $23 a tonne.
The Federal Government has set a target for 20 per cent of electricity to come from renewable energy by 2020, but the report says this could be a stretch because there are not enough projects being built.
“You really need quite a few thousand more megawatts to be produced by the end of the decade,” Mr Creed said.
“There just isn’t enough projects in the pipeline.”