Clean Coal

The Hon. KAYEE GRIFFIN: My question is addressed to the Minister for Mineral Resources. Will the Minister update the House on the development of new clean coal projects in New South Wales?

The Hon. IAN MACDONALD: The development of new clean coal projects is vital to the future of New South Wales. There is no doubt that burning coal without adding to global carbon dioxide levels is a major technological challenge that must be addressed by most nations, which is why the New South Wales Government is focusing on this important area. Coal is the world's most abundant and widely distributed fossil fuel source. In New South Wales alone about 90 per cent of our electricity needs are met from coal-fired power stations. It is important to acknowledge that the New South Wales endowment of low-cost coal resources and availability of proven and mature coal-fired generation technology has provided reliable, low-cost, baseload electricity to this State.

Although the greenhouse emission rate from coal-fired generation technology is improving, capture and sequestration of carbon dioxide emissions are necessary to achieve deep emission cuts. Post-combustion capture [PCC], a process that captures CO₂ from power station flue gases, is a key technology with the potential to reduce substantially the greenhouse gas intensity of existing and future coal power stations. Carbon capture and storage have been recognised by Al Gore, the Stern report and the United Nations Intergovernmental Panel on Climate Change's third report as the most practical solution to reducing greenhouse gases in the short to medium term, having the ability to make large-scale reductions in greenhouse gas emissions.

[Interruption]

In fact, I have met the person who wrote the chapter. The Iemma Government recognises that we need a combination of measures to address climate change. That is why we have proposed a renewable energy target to encourage renewable technologies, such as wind and solar, and a broader emissions trading scheme to encourage a broader range of greenhouse reductions such as clean coal. We want to keep the lights on and protect our jobs while at the same time cutting greenhouse gas emissions. The New South Wales Government is working with industry to meet this challenge. To this end I welcome the coal industry's commitment, from the Coal 21 Fund, of $400 million to the development of clean coal technologies in this State.

Today I inform the House about a move by Delta Electricity and the CSIRO to develop a $5 million carbon capture pilot plant at the Munmorah power station on the Central Coast. The research scale pilot facility, using an ammonia absorption process for post-combustion capture, is expected to be operational by mid-2008. It will undertake a range of experimental trials to determine the potential to adapt the technology to New South Wales coal and power station conditions, capturing up to 5,000 tonnes of CO₂ a year. Research and development of post-combustion capture fills a gap in the range of technologies under investigation for carbon abatement from coal in Australia. It can be adapted to existing power stations as well as new power plants, and is complementary to other carbon capture and storage demonstration projects under development.

Another advantage is that this novel technology may be exported in the future. It is hoped that this project, in conjunction with the search for carbon geo-sequestration sites by the Department of Primary Industries, will provide the base for a $150 million demonstration scale carbon capture and storage project in New South Wales by 2013. When coupled with CO₂ sequestration, post-combustion carbon capture offers the potential for an 80 per cent to 90 per cent reduction in carbon emissions from power stations—a great objective indeed. The development of clean coal technology and knowledge supports the continuation of an industry that provides enormous economic benefits for New South Wales and will continue to make sure New South Wales stays open for business.