PM turns up heat on solar power

Joseph Kerr and Dennis Shanahan

October 25, 2006

A PROPOSED $400 million solar plant that could deliver 154 megawatts of power will be the cornerstone of the Howard Government's fight against climate change.

In a political shift that steals an approach trumpeted by federal Labor, the federal and Victorian governments will contribute $125 million towards the plant, to be built in northern Victoria using technology developed by Melbourne firm Solar Systems.

The announcement today, part of a $230 million package, is the first in a series that will see an eventual $2 billion invested in new technology aimed at cutting greenhouse emissions.

A coal-drying project in the Latrobe Valley is also expected to be announced today, to help burn Victoria's large brown coal deposits more cleanly than current technology allows. Other projects include seed funding for developing affordable ways of pumping carbon gases from coal-fired power stations underground or diverting carbon dioxide from coal before it is used to generate electricity.

The federal Government hopes its spending will encourage up to $10 billion in greenhouse-friendly electricity projects.

The funding is also going towards developing solar and wind technologies as part of a mix between fossil fuel power and renewable energy sources.

Treasurer Peter Costello, who will announce the funding today with Industry Minister Ian Macfarlane, has kept alive the prospect of domestic nuclear power, predicting that a plant will be built in Australia as soon as it becomes economically viable, perhaps within 10 years.

Mr Costello said the Government should not legislate to stop companies investing in nuclear energy apart from on safety and environmental grounds. "I don't think we should legislatively stop it," he said yesterday.

"I think we should legislatively say, provided you meet all of the requirements in relation to safety and export controls and all those sorts of things, environmental consideration, that there is no legislative bar and then I would let the market work. And the day it becomes commercial someone will build it."

The Howard Government's announcements come before the release next week of a British review, which will radically change the attitude to the economic effect of climate change with long-term predictions of economic costs if it's not addressed quickly.

Before heading to Fiji for the Pacific Islands Forum, where climate change and rising sea levels are major concerns, John Howard said climate change had to be addressed.

The Prime Minister said there was no single answer, but Australia's role as an energy producer for the world meant it should look at technological ways to cut greenhouse emissions from coal-fired power.

Instead of simply converting direct sunlight that hits expensive photovoltaic cells to electricity, the Solar Systems technology works by concentrating the sun's rays with cheap glass and steel on to highly efficient photovoltaic units. The Melbourne-based company has been focusing its efforts on drawing ever greater efficiencies from photovoltaic cells, as well as improving its mirror technology. It has invested more than $40 million in developing its technologies.

Such a solar power station would be one of the biggest in the world, but would produce only a quarter of the power of a small coal-fired station.

The funding comes from various federal Government commitments, including promises under the Asia-Pacific Clean Development agreement - struck by the AP-6, which includes India, China and the US - of $500million, state governments and the coal industry's own $300million.

A spokesman for Victorian Energy Minister Theo Theophanous said the state was "likely to attract more significant renewable energy projects thanks to our renewable energy targets, which will cut 27 million tonnes of greenhouse gas emissions".

More announcements are expected in Queensland - where Premier Peter Beattie has pledged his own funding to develop clean coal technology - and one other state.

Mr Beattie recently said he wanted a clean coal process developed before he committed Queensland, a large coal producing state, to a proposed states-backed emissions trading system that would push up the cost of electricity and impose costs on carbon emissions.

Mr Howard on Monday said the Government was about to reveal funding "for exciting new technologies, including those designed to ensure that the use of our abundant fossil fuel reserves will in the future occur in a cleaner, greener fashion, thus reducing the process of climate change".