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End of carbon tax drives brown coal use increase

MICHAEL BRISSENDEN: New data shows brown coal use in electricity production has surged to its highest level in three years.

High emission brown coal now constitutes up to a quarter of the coal used to generate electricity in Australia's largest energy market - the most since 2012.

The abolishment of the carbon tax is thought to be the driving the increase.

Environmental groups say it casts serious doubt on the Government's claim that it can cut carbon emissions by 5 per cent by 2020.

Michael Edwards reports.

MICHAEL EDWARDS: Brown coal produces 50 per cent more emissions than black coal, but it's also one of cheapest ways to produce electricity. And since the middle of last year, around the same time as the end of the carbon tax, its use has been on the rise.

HUGH SADDLER: Brown coal generation has just continued to climb steadily, as it has been doing since June of last year.

MICHAEL EDWARDS: That's Dr Hugh Saddler, the principal consultant for Pitt and Sherry, an environmental engineering consultancy. It compiles monthly data on the national energy market, which supplies electricity to 80 per cent of Australian consumers.

Coal generates 75 per cent of that electricity and the figures from April indicate that brown coal now constitutes 24 per cent of that amount.

HUGH SADDLER: The short term, or so-called (inaudible) marginal costs of production from the brown coal generators is extremely low because the cost of their fuel is very, very low, much lower than for the black coal generators. And that's what gives them their competitive advantage.

MICHAEL EDWARDS: According to Dr Saddler the removal of the carbon tax is the key reason for the increase.

HUGH SADDLER: As soon as the carbon price was abolished it started to go up. That's what we saw. And what we've been reporting every month since July of last year when the price went off is that brown coal generation immediately started going up. And that was because it was put in a much better competitive position than it has previously been, vis-a-vis the other coal and gas fire generators.

MICHAEL EDWARDS: Environmental groups are alarmed but not surprised.

Kellie Caught is the manager for Climate Change for the World Wildlife Fund (WWF).

KELLIE CAUGHT: Our electricity sector has just become more polluting, which is quite the opposite of what we're meant to be doing.

MICHAEL EDWARDS: Electricity production generates about a third of Australia's greenhouse gas emissions. The Federal Government is confident Australia will meet its target for cutting year 2000 level greenhouse gas emissions by 5 per cent by 2020. This is partly due to a prediction of declining demand for energy.

But Kellie Caught says this new data adds to the scepticism about the Government's plan.

KELLIE CAUGHT: Certainly all the analysis that we've seen from the experts have doubts that the Government will still be able to achieve the 5 per cent cut by 2020. The Government's latest emissions reduction fund auction shows that a lot of what they purchased won't be realised until after 2020.

So we're very concerned that they won't achieve that 5 per cent cut. And that 5 per cent cut is quite weak compared to other countries. We'd be asking the Government to do a lot more than what's currently on the table.

MICHAEL EDWARDS: Overall, emissions from the electricity generation sector have increased by more than 3 per cent since the end of the carbon tax.

source: http://www.abc.net.au