Labor calls on the Morrison government to urgently release the business case for a new taxpayer-funded gas plant in the Hunter Valley, saying the coalition’s $ 600 million proposal to Kurri Kurri is not not justified by economics or engineering.

As former Shadow Minister of Resources and MP Hunter Joel Fitzgibbon rushed to endorse the proposal, Shadow Climate Change Minister Chris Bowen told reporters on Wednesday that there was now an urgent need to release the business case for the gas plant given that the government intended to spend $ 600m “of the taxpayer’s money on a plant that its own experts do not support”.

Bowen said Tuesday night’s announcement sounded “like a cynical attempt to fight gas and continue climate wars, or to reward top liberal donor who owns the Kurri Kurri site.”

“Workers support a continued role for gas in firming up and peaking electricity supplies, but the gas projects that pile up will be funded by the private sector, not by taxpayers,” Bowen said.

“Just last week, Energy Australia committed to a new gas-hydrogen plant with just $ 5 million in Commonwealth support. If Kurri Kurri’s proposal stacks up, why does she need 120 times the federal grant? “

The Hunter’s new gas plant has been around for months. Confirmation came four days before a state by-election in the Upper Hunter.

This coincided with the International Energy Agency’s warning in a major report that new investment in coal, oil and gas had to stop this year if the world was to stay within safe limits of the world. global heating.

While Scott Morrison said on Wednesday that Kurri Kurri’s proposal was necessary to “keep pressure on electricity prices across New South Wales in particular”, the new plant is expected to run on diesel initially.

Many energy experts have pointed out that gas and diesel are significantly more expensive than the alternatives currently available in the energy market. According to a environmental impact statement Filed with the NSW government, the Kurri Kurri plant is expected to operate at only 2% of full capacity throughout the year, filling gaps during peak demand periods.

The Kurri Kurri site was previously an aluminum smelter. It was purchased by Hunter Valley real estate developers Jeff McCloy and John Stevens in 2020. Federal Department of Energy officials were asked last month if they knew McCloy “was found by NSW Icac for making illegal donations to Liberal Party politicians? Officials said they were not aware of this story.

The Energy Council of Australia, which represents wholesalers and retailers of electricity and gas, said it is committed to working with the Morrison government to resolve any distribution issues in the electricity grid during the transition towards low-emission energy.

But the board’s chief executive, Sarah McNamara, noted: “We are seeing more and more investment driven by government support, rather than market dynamics and independent expert assessments of what is really needed. .

McNamara said constant government intervention made it difficult for the private sector “to make final investment decisions.”

“It is still not clear why an additional 1,000 MW of capacity is needed to compensate for the closure of Liddell,” she said.

“The operator’s analysis of the market does not support this claim, and recent developments in NSW, including that state’s energy plan and the announcement of the extension of the Tallawarra power station are relevant. “

The Clean Energy Council called the government’s move “reckless” and said it undermined efforts “to provide cheaper electricity, reduce emissions and build a reliable energy system.”

Its chief executive, Kane Thornton, said 14 gigawatts of solar and wind power have been built in the past three years, and that there have been new commitments to build 600 megawatts of large batteries in the quarter alone. last, or roughly the equivalent in capacity of the Kurri Kurri. plant. He said the council’s recent analysis found that battery storage is now 30% cheaper than “peak” gas-fired power plants and fulfills a similar role.

Tony Wood, director of the energy program at the Grattan Institute, said the Kurri Kurri plant was “just not necessary”. “It is not necessary for price, it is not necessary for reliability and it is not necessary for reducing emissions,” he said.

Fitzgibbon – who has been at odds with his colleagues on climate and energy policy since Labor lost the 2019 election, and he suffered a major downsizing of his seat – told Guardian Australia he was happy to support the Kurri Kurri project.

Fitzgibbon said the Morrison government created a market failure and was now forced to fix it. “I am also very confident that Snowy Hydro will make a strong return on its investment,” said the Labor MP.

Shadow Treasurer Jim Chalmers told the National Press Club he understands Fitzgibbon has a “point of view as a local member and as someone who has long been interested in these matters” and that was good”.

But he said the Labor Party’s view was $ 600 million “it’s not a small change – it’s a massive investment in a project”.

“There could be other worthy projects across the country, [so] Let’s see the business case for this particular one.

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