Angus Place Colliery near Lithgow may soon be a worthless stranded asset because its main customer, Mt Piper power station, could be broke by 2025, new economic analysis shows.
The Institute for Energy Economics and Financial Analysis (IEEFA) has released a report today that shows Mt Piper power station, owned by Energy Australia, losing $50 million a year by 2025.
The analysis echoes comments made by Australian Energy Security Board Chairperson Kerry Schott last week, who said coal-fired power stations “will probably go four or five years earlier [than their scheduled closure date] because they are not making any money and they may go before that”. [2]
“It is hard to imagine Energy Australia wearing $50m annual losses for long before they decide to pull the pin,” Nature Conservation Council Chief Executive Chris Gambian said.
“If that happens, the Angus Place Colliery expansion will be a white elephant — a stranded asset and a toxic legacy.”
The NSW Planning Department is currently considering a proposal to expand the Angus Place Colliery to supply Mt Piper power station.
“The NSW Government should reject the Angus Place application because the economic argument, which was always flimsy, is getting weaker every time there is a new report,” Mr Gambian said.
“The expansion plans don’t stack up, not in terms of the ecology, the economics or the climate.
“This mine expansion would cause a local ecological catastrophe by draining and killing rare wetlands, and for what? It seems unlikely to even keep Mt Piper going.
“There are huge opportunities beyond coal for communities like Lithgow, but they will require investment by the government and business.
“Lithgow can’t reach its post-coal potential alone - it needs substantial support from the state and federal governments. That support is conspicuously lacking.
“Change in our energy systems is gathering pace so coal communities need government help to get on board or they will be left behind.
“Germany has created a 40 billion euro fund to help its coal communities develop new economic opportunities.
“We need something similar to ensure our communities don’t suffer because of the rapid international shift away from coal.
“We call on the NSW government to set aside a substantial fund, with billions of dollars to ensure no worker is left high and dry and that coal mining regions will have sufficient resources to adapt economically.”
References
[1] Fast Erosion of Coal Plant Profits in the National Electricity Market, IEEFA, February 2021. See Figure 1, page 3.
[2] Coal power stations going broke: Schott, AFR, 16-2-21