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Gas sector explodes at billion-dollar gift to coal

The Australian Pipeline Industry Association has criticised federal government cash payments to the most emissions-intensive coal-fired power generators, worth a combined $1 billion, as a ”gift of dirty money”.

The payments from the $5.5 billion Energy Security Fund are designed to cushion the impact of the carbon price on electricity generators, and form part of the Clean Energy Future package announced last year.

Distribution of the cash payments, to be made in June, to various generators was announced on Friday.

As expected, the bulk goes to the large brown coal-fired power stations in Victoria’s Latrobe Valley, including Hazelwood ($265.9 million) and Loy Yang B ($116.9 million), both majority-owned by giant utility International Power-GDF Suez, TRUenergy’s Yallourn power station ($257.5 million), and Loy Yang A - soon to be wholly acquired by AGL Energy ($240.1 million).

In a statement yesterday, APIA chief executive Cheryl Cartwright said: ”This latest handout continues the government’s unfair funding to natural gas alternatives.

”There is no federal government assistance for the natural gas industry, but substantial assistance for renewable energy and, now, a further $1 billion or more for coal.

”This $1 billion for the coal-fired power industry is not linked to reducing emissions, and comes ahead of further proposed funding to some of these generators to encourage them to close down.

”This does not make sense … [it] is effectively a gift of dirty money.

”At the very least, the $1 billion handout should be linked to undertakings for the highly emissions-intensive coal-fired power stations to convert to gas,” she said.

In a statement on Friday, the part-owner of Hazelwood and Loy Yang B, International Power, said that the cash payments would provide ”some level of compensation for the impact of the introduction of a carbon tax on July 1, 2012, though significantly less than the actual impact on its business”.

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