Vales Point Power Station

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{{#badges: CoalSwarm|Navbar-Australiacoal}}Vales Point power station, also referred to as the Vales Point B power station, is a 1,320-megawatt (MW) coal-fired power plant in New South Wales, Australia.

The owner of the plant, Delta Electricity, is seeking Australian Government's Underwriting New Generation Investments program for a possible 660 MW expansion on either the site of the now demolished Vales Point A power station, which it owns, or at the nearby Liddell power station, which is owned by AGL. (See Vales Point A power station (replacement) for more details.) It also sought financial support for a 40 MW upgrade of the existing Vales Point B plant.[1]

In March 2019 Prime Minister Scott Morrison announced that Delta Electricity's proposal had been shortlisted but provided no details.[2]

Location

The map below shows the location of the plant, near Mannering Park, New South Wales.

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Background on Plant

Vales Point Power Station is a 1,320-megawatt (MW) coal-fired power station owned by Sunset Power International (which trades as Delta Electricity) and located in New South Wales, Australia. The power station comprises two 660 megawatt coal-fired generating units which were installed in the 1978-79, replacing four smaller older units comprising the Vales Point A power station which had been built in the 1960's.[3]

The station was sold by Delta Electricity to Sunset Power International for AUD$1 million in November 2015. "Instead of NSW incurring ongoing losses, the sale of Vales Point will deliver a benefit to the State of more than $130 million, inclusive of proceeds and residual cash. Vales Point, which has a technical life to 2029 and guaranteed coal contracts in the medium term, was sold above its retention value for $1 million, with over $130 million of cash also returning to the State," the NSW Treasurer, Gladys Berejiklian stated in a media release. The sale process, which was overseen by Kerry Schott, completed the sale of all of the previously state-owned coal power plants. As part of the deal Sunset Power International agreed to maintain the workforce for a period of four years and take on all decomissioning costs.[4]

The Chairman of Sunset Power, Trevor St Baker, told the AFR "we are aiming for at least seven years [of operation] if coal-fired power generation continues to be required in NSW."[5]

"It's been a loss-making business for several years ... We have been involved in this business for a long time on the coal side and the power side and we intend to trade with the market in a smarter and more effective way," St Baker said.[5]

Carbon capture project

In 2010, a carbon capture and storage (CCS) project at Delta Electricity's now mothballed Munmorah power station was set for expansion, after receiving US$28 million in funding. The project was moved to Vales Point power station in 2012, after Munmorah closed. However, a 2015 report from the state government's Coal Innovation Fund says the CCS project has now been terminated, due to the Commonwealth withdrawing funding as well as a lack of suitable storage options being available in the foreseeable future. The project aimed to store up to 100-thousand tonnes of CO2 annually.[6]

Environmental Impact

Air pollution

In February 28 2017 Environmetnal Justice Australia (EJA) reported that residents of Mannering Point, which adjoins the Vales Point power station, reported coal trucks dumping thousands of tonnes of coal outdoors at the power station which clouds of coal dust. Community members investigated but found coal trucks were uncovered and no water was sprayed to control dust. The pollution was reported to the Chief Regulator of NSW, Mr Mark Gifford, and Regional EPA Director, Mr Adam Gilligan, on the evening of Thursday, February 16. However, the closest EPA air pollution monitoring is more than 25 kiloemtres away from the power station.[7]

In April 2018 it was reported that emissions of the fine particle pollutant PM2.5 from Vales Point Power Station had increased from 12,000kg to 70,000kg in the past 12 months, according to the latest National Pollution Inventory (NPI).[8] "The question is, what are they burning or are they just wildly trying to rectify the larger readings from 10 years ago, because they are now under scrutiny from the public and organisations like Environmental Justice Australia (EJA),” said Mr Mike Campbell of the Community Environment Network. “It goes to show that the industry self-recording these outputs to the NPI is patently ridiculous."[8]

“The Vales Point power station is arguably Australia’s most urban power station. It is located in a residential area with almost half a million people living in the cities of Newcastle and Lake Macquarie (to the north) and 300,000 on the central coast (to the south). This power station is not a good neighbour,” wrote Dr James Whelan from Environmetnal Justice Australia in a report on Australia's power stations.[9]

The EJA also reported that in the four years to 2013, which was prior to Delta Electricity’s purchase of Vales Point, the power station had reported nine breaches of licence conditions in its annual compliance statement to the NSW EPA. However, since Delta Electricity took ove the plant in 2016 the company had not notified the NSW EPA of a single licence breach. “From our research, the likelihood that an ageing power station such as Vales Point has not breached a single licence condition in four years is low,” the EJA said. Delta stated that data for the plant was measured according to NSW EPA standards by an independent company and supplied to the EPA.

In 2018 Whelan noted that “at present Vales Point power station is licenced to emit concentrations of fine particle pollution that are twice the level permitted for the Eraring power station just 25km away, while Vales Point’s mercury concentration limits can be up to five times higher than those from Eraring.”[10]

Following significant media coverage of licensing discrepancies of the states five coal fired power stations, in May 2018 the EPA recommended stricter and more consistent pollution licences.[10]

EJA also reported that the company had been transporting coal via open trucks rather than via an underground conveyor belt. “Dumping coal in extremely hot, windy conditions created clouds of coal dust, which spread to nearby residential areas, in breach of the power station’s licence,” the report said. Delta claimed "no dust left the stockpile site and there was no licence non-compliance."[9]

Coal ash dam

Whelan told the Guardian that a NSW Environment Protection Authority (EPA) audit of the Vales Point power station coal ash ponds, which was completed in October 2015, "found eight instances of non-compliance (none of which was reported by Delta Electricity in its annual compliance statements). No compliance action was taken against Delta Electricity for any of the breaches found in its audit."[9]

Concerns have also been raised about the structural integrity of the dam and the absence of any lining to prevent groundwater emissions.[11]

In November 2018, in its approval for a solar energy project at Vales Point, the EPA stated that its concerns about the coal ash pit had been allayed.[12] Environment Justice Australia researcher Dr James Whelan disagreed with this assessment. “The toxic risk is largely unassessed and there are no agreed standards or methods for ash dump remediation in NSW."[12]

Future shutdown date

In September 2017, coal baron and Sunset Power director Trevor St Baker told the Australian Financial Review that the company is taking steps to extend the plant's life beyond its current shutdown date of 2029, when the plant will be 50 years old. Baker called on Prime Minister Turnbull to pressure banks to loan money "to companies wanting to extend the life of existing facilities or even build new high-efficiency coal power plants."[13]

St Baker told the AFR that "there is no such thing as a 50-year economic life for a coal plant." Mr St Baker said in an interview with the Australian Financial Review. "We are investing in life extension with a capability beyond 2029. We'll wait and see what happens progressively by then but the technology is capable of extending and while ever the fuel is there we will extend its life."[13]

"We are scrambling around for more coal and competing with the export price trying to make up part of the generation Hazelwood was supplying NSW previously. But it's expensive and there isn't a lot around," he said.[13]

St. Baker also compained that Australian banks were not interested in funding new coal plants. "The only reason there is no coal-fired power station being built is because no Australian bank is going to be on the front page of the paper lending to coal. We have to go overseas for lending for our Loy Yang bid. It's ridiculous."[13]

St. Baker also supported changing the Clean Energy Target specifications so that even coal plants with carbon dioxide emissions of 0.8 tonnes per megawatt of energy would qualify. "I think working out a level that base load generation in a portfolio – even from La Trobe Valley – can meet would be a way to actually to have some signal [in the market] rather than no signal," he said. "We're not adverse to some bipartisan number and I think 0.8 would be a number which would work as long as there is a level playing field for finance. We need to counteract the intimidation of Australian banks and to have policy certainty."[13]

St Baker has claimed that SPI is considering the option of keeping Vales Point operating to 2049.[14]

Interest in buying Liddell coal plant

In September 2017 Delta Electricity flagged that it may be interested in buying AGL's nearby Liddell power station. (At the time coal industry lobby groups and some politicians including the then Minister for Energy, Josh Frydenberg, were campaigning for AGL to be forced to either sell the plant or redevlop it as a coal plant rather than implement its plan to shut it down in 2022 and develop a range of other energy supply options.) Delta’s company secretary, Steve Gurney, told Guardian Australia it is currently unclear whether the purchase is viable without “some sort of cash injection”.[15]

“Would we be interested? I think our position is ‘Yeah, we’d have a look at it’ but that’s as far as we would go at the moment ... It's very, very early days. We’re looking at other things as well, so it might be at the end of the day that our money is better put into other projects we’re working on.”[15]

Gurney confirmed that Delta had had discussions with the federal government on energy policy issues but, the Guardian reported, "could not categorically say whether or not Liddell had been discussed."[15]

Expansion plans

In January 2019 St Baker told The Australian that he would submit a proposal to Australia's Minister for Energy, Angus Taylor, for government support from the Underwriting New Generation Investments program for three projects including a new A$2 billion 660 MW black coal plant in NSW's Hunter Valley at the Vales Point A power station site or at AGL's Liddell power station.The report claimed "St Baker has lined up a Chinese joint-venture partner" but did not name the company. St Baker said that financing the projects would not be sought from Australian banks but instead would rely solely on international lenders.[16]

In March 2019 Prime Minister Scott Morrison announced that Delta Electricity's proposal had been shortlisted but provided no details.[2]

Subsequently, St Baker stated that the shortlisted project was for an upgrade of the two existing turbines at the Vales Point B plant.

=Turbine upgrade plans

St Baker told the Newcastle Herald that the shortlisted Delta Electricity application for funding under the Underwriting New Generation Investments program was for the costs of 20 MW upgrades of the two turbines at the Vales Point B plant. "This government support will help add another 40 megawatts to the system. The upgrade means it has a life as long as coal is needed, certainly for 2029 at least," St Baker said.[1]

Delta Electricity company secretary Steve Gurney said the upgrade was for new turbine blades which would increase plant efficiency. He claimed that "the plant would produce the same amount of electricity but with reduced emissions."[1]

However, the claim that the upgrade would simultaneously increase capacity and reduce emissions was challenged by Doctors for the Environment spkesperson Ben Ewald. "If they generate more power from the same coal we will have the same pollution burden. If they generate the same power from less coal there would be a small pollution reduction, but if they are increasing the plant's power capacity by 40MW why would they not increase power output?," he said.[1]

Company finances

In October 2017 Adam Walters, the Principal Researcher with Energy Resource Insights, noted that Sunset Power International’s 2017 financial report revealed that in 2017 it sold over $380 million of electricity from Vales Point. By comparison, in its last full year of state ownership Vales Point generated electricity sold for $270 million.

The annual report also revealed that in April 2017, the company bought 14 $1 shares back from existing shareholders $2,850,000 per share. The result of this was that the shareholders received A$39,900,000 from the buy back.

The company also decided to operate Vales point until at least 2029. "As a result of this decision, plus increased electricity prices and a different accounting method, Sunset Power has increased its valuation of the power station assets by over $650 million to $720 million," Walter noted.[17]

Lobbyists

According to the Australian Government's Register of Lobbyists, Sunset Power International has hired the SAS Consulting Group as its federal lobbyist. (The lobbying firm also represent the St Baker Energy Innovation Fund.)[18]

According to the New South Wales Government Register of Lobbyists SAS Consulting Group has represented Sunset Power International with the NSW Government since July 18, 2017. (Since September 2016 SAS Consulting has also represented ERM Power, a company founded by Trevor St Baker and which he was a Chairman/Deputy Chairman and director of until July 2017.)[19]

Plant Details

  • Sponsor: Sunset Power International
  • Parent company: Sunset Power International
  • Location: Mannering Park, New South Wales, Australia
  • Coordinates: -33.1610116, 151.5452521 (exact)
  • Status: Operating
  • Gross capacity: 1,320 MW (Units 1 & 2: 660 MW)
  • Type: Subcritical
  • In service: 1978-79
  • Coal type:
  • Coal source:
  • Source of financing:

Proposed expansion

  • Sponsor: Sunset Power International
  • Parent company: Sunset Power International
  • Location: Mannering Park, New South Wales, Australia
  • Coordinates: -33.1610116, 151.5452521 (exact)
  • Status: Proposed
  • Gross capacity: 660 MW
  • Type:
  • In service:
  • Coal type:
  • Coal source:
  • Source of financing:

Contact details

Level 7
287 Elizabeth Street
Sydney, NSW 2000
Phone: 02 4352 6111
Email: info@de.com.au

Articles and Resources

Related SourceWatch Articles

Delta Electricity documents

  • Delta Electricity, Environmental Licences and Monitoring, Delta Electricity. (This page has an archive of the company's monthly pollution monitoring reports in pdf format for the Vales Point power station.)

References

  1. 1.0 1.1 1.2 1.3 Matthew Kelly and Nicole Hasham, "Federal government shortlists upgrade of Vales Point power station turbine", Newcastle Herald, March 28, 2019.
  2. 2.0 2.1 Prime Minister Scott Morrison, "Delivering affordable and reliable power", Media Release, March 26, 2019.
  3. Delta Electricity, "Vales Point", Delta Electricity website, accessed May 2011.
  4. Gladys Berejiklian, Treasurer, Minister for Industrial Relations, "Gentrader deal cleand up: Vales Point and Cobbora", Media Release, November 19, 2015.
  5. 5.0 5.1 Ben potter, "NSW government sells Vales Point power station for $1m", Australian Financial Review November 19, 2015.
  6. "Power station carbon capture and storage project terminated," abc.net.au, Aug 10, 2015
  7. "Environmental Justice Australia calls on EPA to act on serious air pollution at Vales Point", Coast Community News, February 28, 2017.
  8. 8.0 8.1 PM2.5 emissions have increased by almost 500 percent, Coast Community News, Apr. 19, 2018
  9. 9.0 9.1 9.2 Mikey Slezak, "Mismanagement alleged against only company interested in Liddell power station", Guardian, September 8, 2017.
  10. 10.0 10.1 "No extra public air monitoring but Vales Point licence tightened", Coast Community News, May 16, 2018.
  11. "Environmental Justice Australia lawyers concerned about 400 hectare ash dam", Central Coast News, August 22, 2018.
  12. 12.0 12.1 EPA stands by assessment of pollution threat from Vales Point power station ash dam, New Castle Herald, Nov. 14, 2018
  13. 13.0 13.1 13.2 13.3 13.4 "Delta Electricity to extend life of Vales Point coal-fired power station", Asutralian Financial Review, 17 September 2017.
  14. "Lake Macquarie power station that once powered the state suddenly eyeing off 2049", Newcastle Herald, September 8, 2018.
  15. 15.0 15.1 15.2 Christopher Knaus, "Liddell power station could be bought by Delta Electricity", Guardian, September 6, 2017.
  16. Perry Williams, "Chinese in $6bn clean coal plan", The Australian, January 19, 2019.
  17. Adam Walters, "Vales Point: Coal profits from energy policy chaos", RenewEconomy, October 24, 2017.
  18. "Australian Government Register of Lobbyists", Australian Government: Department of Prime Minister and Cabinet, accessed September 2018.
  19. "SAS Consulting Group", Electoral Commission of NSW, accessed Septmber 2018. As the Elecoral Commission of NSW website doesn't enable direct links to the lobbyists profile a screeshot is here.)

External Articles