* Controversial power plant frozen after legal ruling
* 600 MW plant designed to use brown coal and gas
By David Fogarty
SINGAPORE, April 17 An Australian firm has
frozen development of a controversial A$1.2 billion ($1.23
billion) brown coal-gas hybrid power plant after a ruling by a
tribunal effectively delayed construction, putting the future of
the project in doubt.
Energy technology firm HRL, one of a number of companies
trying to develop clean-coal power plants, said it had frozen
design and pre-construction work on a proposed 600-megawatt
plant in the southern state of Victoria.
It made the decision after a state tribunal ruling last
month linked a go-ahead for the project to Australian government
efforts to shut down some of the power industry's biggest
greenhouse gas emitters under a programme known as "contract for
"As a consequence of the imposition of the condition, there
is considerable uncertainty as to the date on which construction
of the project could commence, if at all if there is no
contracts for closure," HRL said in a statement.
HRL aims to cut greenhouse gas emissions from using brown
coal for power generation, but its plant has been criticised by
green groups who say emissions would still be higher than more
efficient gas-fired power plants. They also favour greater use
of renewable energy such as wind and solar.
The firm has won pledged funding of $100 million from the
Australian government and $50 million from the state government
in Victoria, which has the world's second-largest reserves of
brown coal. However, the latest delay means it could miss out on
the $100 million federal grant.
A HRL spokeswoman confirmed the project, in development for
more than 5 years, had been frozen. The plant had been slated
for construction in Morwell, in the Latrobe Valley east of
Melbourne, the state capital.
The valley's power plants generate most of the state's
electricity and use brown coal from adjacent open-cut mines. But
the level of greenhouse gas emissions has come under intense
scrutiny as the nation tries to curb the growth in carbon
dioxide (CO2) emissions.
A national carbon pricing scheme across most industrial
sectors starts in July. Emissions from the power sector comprise
more than a third of Australia's total carbon emissions and have
grown 50 percent since 1990. Coal produces about 80 percent of
the nation's electricity.
Brown coal power plants in Victoria generate between 1.25
and 1.4 tonnes of CO2 per megawatt/hour, versus 0.90 for black
coal and 0.4 to 0.5 for new-build gas-fired power plants.
According to project documents, HRL's hybrid plant would be
the first of its type in Australia at a commercial scale and
emit about 40 percent less CO2 than existing brown coal plants.
The HRL design first dries out the brown coal, then gasifies
it before mixing it with piped-in natural gas.
Last month, the tribunal ruled in favour of the HRL plant
but added a condition that construction could not proceed until
the federal government had reached agreement with other
generators to shut down at least 600 MW of coal-fired generation
The federal government, under its carbon pricing scheme, is
negotiating with generators, including International Power GDF
Suez , to close up to 2,000 MW of Australia's
most carbon-polluting power stations, three of which are in the
It has set a June 30 deadline for negotiations, the same
date for HRL to meet key project milestones, including bank
financing, before it can receive the A$100 million grant.
(Editing by Richard Pullin)