Government support and a solid regulatory framework are vital for low-carbon power generation to be able to compete effectively in the energy market, according to Hydrogen Energy chief executive Lewis Gillies.
Government support and a solid regulatory framework are vital for low-carbon power generation to be able to compete effectively in the energy market, according to Hydrogen Energy chief executive Lewis Gillies.
Announcing the Rio Tinto/BP joint venture’s commencement of feasibility studies for a $2 billion low-emissions coal-fired power station in Kwinana, Mr Gillies said that, because of the higher cost of hydrogen-fuelled generation, the project would require policy support to recognise and encourage the benefits it delivers.
Located alongside BP’s Kwinana refinery and Rio Tinto’s HISmelt facility, the proposed 500-megawatt plant would be fitted with carbon capture technology, allowing it to capture almost 90 per cent of its carbon emissions, or four million tonnes of carbon dioxide.
That’s the equivalent of taking 750,000 cars off the road annually, Mr Gillies said.
The carbon will be transported offshore via pipeline and stored in a geological formation two kilometres beneath the seabed of the Perth basin.
Electricity from the power station will be fed into the grid and used by Western Australian consumers, providing enough energy to power 600,000 homes.
The project will be the first in Australia for the company, which was launched last week, for the purpose of developing hydrogen power stations both in Australia and overseas.
Plans are also under way for two other hydrogen power plants, in Scotland and the US.
Mr Gillies said the new plant would signal the country’s commitment to combating climate change, giving Australia a place on the international climate change platform that was unparalleled.
“We are the largest exporter of coal in the world. In a carbon constrained world of the future, the development of these technologies secures this value option for Australia,” Mr Gillies said.
Subject to approvals and successful feasibility study outcomes, investment for the project is expected to be finalised by 2011, with the plant scheduled to come online after a three-year construction period.
While Mr Gillies stopped short of saying the company was putting pressure on the federal government to implement a national emissions trading scheme, an option most now consider inevitable, he said a trading scheme was the key to a national and global solution for climate change.
He indicated the company would pursue a number of funding options, including government grants, and the possibility of passing additional costs onto consumers.
But WA Sustainable Energy Association chair Dr Ray Wills said feasibility studies were not a guarantee of a solution, and while he applauded this initiative, industry must also look to responses available today and not just wait for measures that will take 10 to 15 years to show benefits.
Dr Wills told WA Business News government had a major role to play in implementing policies to send signals to the market that allowed businesses to make investment decisions on new low-emissions technologies, or the deployment of technologies already available.
“In the longer term, any scheme like this one will be bolstered by an emissions trading system,” he said.
The federal government’s emissions trading taskforce is due to report its findings later this month, which could also include a potential model and ‘carbon price’ for an Australian scheme.
