More clean energy funding pulled
THE Federal Government today deserted another section of its clean energy package, removing a $5 billion worth to shut five, high-emitting coal-fired power stations.
Resources Minister Martin Ferguson announced the government had decided to cease the contracts for closure of three Victorian, one New South Wales and one Queensland power plant.
The contracts were an incentive to the five power stations to shut down operations to help the government meet its emissions reduction targets.
While earlier estimates put the total cost at about $5 billion, that cost was never included in the Federal Budget.
It is understood difficulties arose because of large discrepancies between the amount the government was willing to pay the power stations and the valuations the companies themselves had on their assets.
While the original program was meant to provide certainty for the power station owners, despite the introduction of the carbon tax, Mr Ferguson's announcements has further clouded the issue.
But the abandonment of the contracts came as no shock with Australia increasingly moving away from coal-fired power stations.
Mr Ferguson said the contracts for closure program was "only one part of the clean energy strategy".
"In some ways I might say the whole range of the energy market has changed dramatically in terms that there aren't projections on where the market is going since we actually started this process," he said.
"The nature of the price on carbon and the operation of the market will determine the life of those assets and whether or not there is new investment."
The Collinsville Power Station near Mackay in Queensland was one of the five which has been negotiating with the government on the program.
Owners of the station, Ratch Australia Corporation, were unable to comment on how the decision would affect the station on Wednesday.