Water

Cold water poured on coal call

By Country News

The future of a major upgrade of the Snowy Hydro scheme rests on financial viability, but the Federal Government has rejected calls to replace the project with coal-fired power stations.

Former Nationals leader Barnaby Joyce believes the expected $4.5billion cost of Snowy Hydro 2.0 would be better off used on funding new coal-fired power plants.

But Federal Finance Minister Mathias Cormann poured cold water on the idea, saying there was no such proposal before the government.

‘‘That is not at all on the table in any way, shape or form,’’ Senator Cormann told parliament last week.

A decision on the scheme’s upgrade, a signature project of dumped prime minister Malcolm Turnbull, is due later this year.

‘‘It will be made based on commercial considerations and based on whether or not the proposal stacks up on commercial grounds,’’ Senator Cormann said.

‘‘That is what the Australian people would expect us to do.’’

Mr Joyce told The Australian newspaper he would prioritise coal-fired power stations, arguing initial estimates continue to blow-out and could increase to $6.5billion.

‘‘It is a net energy user — it doesn’t create energy,’’ Mr Joyce said.

‘‘You can’t increase supply by reducing supply, and this means you need base-load power.’’

Federal Energy Minister Angus Taylor said the business case for Snowy 2.0 needed to stack up on ‘‘its own merits’’ to be viable.

Labor MP Mike Kelly, whose seat of Eden-Monaro takes in the Snowy project, told parliament Mr Joyce’s comments were ‘‘wrong on so many levels’’.

He said the funding for Snowy 2.0 would be privately sought, not from public coffers.

‘‘What is this member trying to do? Is he going to try and force private financiers to finance coal-fired power stations that every investor has abandoned?’’ Mr Kelly said.

He said a feasibility study had found the project was viable if the government committed to an ambitious renewable energy target of 60 per cent by 2040.

‘‘This project is specifically designed to achieve our transition to 100 per cent renewable energy.’’

Prime Minister Scott Morrison should publicly declare his commitment to the project, Mr Kelly said.