NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business

Niesche: Turnbull's coal conundrum

Christopher Niesche
By Christopher Niesche
Business Writer·NZ Herald·
12 Feb, 2017 12:12 AM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Neither side of politics in Australia gives any sign about doing much to reduce carbon emissions. Photo / Getty

Neither side of politics in Australia gives any sign about doing much to reduce carbon emissions. Photo / Getty

Christopher Niesche
Opinion by Christopher Niesche
Business Writer
Learn more

It is a strange turn of events that when our politicians fail to stand up for what they believe in, sometimes our companies do.

Take Donald Trump's ban on residents from several Muslim nations from entering the US. While Australia's political leadership failed to condemn the ban, Qantas was quick to react, saying it would help any Australians with dual citizenships who had been affected by it, either refunding their flight costs or flying them home.

And while politicians have tied themselves in knots trying to demonstrate that they are neither in favour of or opposed to gay marriage, a huge number of significant Australian businesses publicly support marriage equality, including all the major banks, the big four accounting firms, Wesfarmers, Origin Energy and Coca-Cola Amatil.

To banning migrants and marriage equality, we can now add greenhouse emissions policy.

A couple weeks ago of Prime Minister Malcolm Turnbull announced that his government is planning to subsidise the construction of clean coal power stations to make electricity more secure and affordable.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

Rising power prices have become a hot-button issue for both businesses and consumers alike.

Adding to scepticism about renewable energy has been the experience of South Australians over the past year or two. South Australia leads the nation in renewable energy generation with about two-fifths of its power produced by wind and solar. But there are times when there simply isn't enough power to meet demand.

Last Wednesday was one of those days. As the temperature in Adelaide hovered about 40 degrees Celsius at 6:30pm, power was cut to more than 40,000 homes for more than half an hour.

Advertisement
Advertise with NZME.

So Turnbull's push for more coal generation hasn't caused too much of a stir in Australia, despite concerns about how carbon emissions will be reduced to meet the country's commitment to the Paris Agreement.

However, the power generation companies who Turnbull would be relying on to build these new coal powered generators appear to want nothing to do with it.

Clean coal power stations are hugely expensive to build and they need to operate for 30 years to produce a return. That comes with a political and technological risk that power companies aren't prepared to carry.

Neither side of politics in Australia gives any sign about doing much to reduce carbon emissions. Likewise, with Donald Trump in the White House, the chances of a more ambitious global accord are non-existent.

But who knows how things might change in five or 10 years, let alone 30?

Likewise, technology is advancing quickly and the price of renewable power is coming down rapidly. Clean coal power is expensive and the day could soon come when wind or solar energy can be produced more cheaply.

In fact, one of the main reasons coal power is currently cheaper than renewable power is that existing coal power stations have already been built and paid for. If they were starting from scratch, they would be far less competitive.

All this means that energy companies don't want to build new power stations when there is a risk of them becoming stranded assets that don't produce a return and no one wants to buy.

Origin Energy, which owns the 2,880 MW Eraring black coal power station in NSW, doesn't plan to build new power stations, saying it plans to close the Eraring power stating in the early 2030s.

Likewise AGL Energy, which owns large coal fired power stations in Victoria and NSW, has a Greenhouse Gas Policy, which states: "AGL will not build, finance or acquire new conventional coal-fired power stations in Australia (i.e. without carbon capture and storage). AGL will not extend the operating life of any of its existing coal-fired power stations."

Advertisement
Advertise with NZME.

The company has said that this policy has not changed, despite the government's power statement a couple of weeks ago. Instead, AGL will build some modern gas-fired plants that can be quickly turned on and off to top up supply.

In the meantime, AGL has the best of both worlds. It is preparing for the future by increasing the amount of wind and solar power it produces and deciding to let its existing coal plants eventually run down.

At the same time, Australia's long, hot summer has driven up energy prices and the profits AGL is earning from existing coal plants.

The company said earnings for the first six months of 2016-17 excluding one-off items and the value of derivative contracts climbed 4 per cent to A$389 million (NZ$414.9m). As a result, the first half dividend of 41c is up 28 per cent and the company expects a full-year profit of close to A$800m.

These are great results for AGL but the company knows that, longer term, its future lies in renewables.

Thus while politicians argue and dither over climate policy, technology and markets will take the lead in the march towards green power.

Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Business

Premium
Property

$66m repair bill for Auckland apartments sparks court action

02 Jul 11:28 PM
Media InsiderUpdated

'A couple of detractors': Revealed - the early battle to get The Casketeers to air on TVNZ

02 Jul 11:18 PM
Premium
Opinion

Roger Partridge: The Dutch lessons NZ needs for regulatory reform

02 Jul 09:00 PM

Audi offers a sporty spin on city driving with the A3 Sportback and S3 Sportback

sponsored
Advertisement
Advertise with NZME.

Latest from Business

Premium
$66m repair bill for Auckland apartments sparks court action

$66m repair bill for Auckland apartments sparks court action

02 Jul 11:28 PM

Two Victopia units face forced sale because of unpaid repair bills.

'A couple of detractors': Revealed - the early battle to get The Casketeers to air on TVNZ

'A couple of detractors': Revealed - the early battle to get The Casketeers to air on TVNZ

02 Jul 11:18 PM
Premium
Roger Partridge: The Dutch lessons NZ needs for regulatory reform

Roger Partridge: The Dutch lessons NZ needs for regulatory reform

02 Jul 09:00 PM
UK bond rates, toll roads and scrutiny of SOE pay

UK bond rates, toll roads and scrutiny of SOE pay

Gold demand soars amid global turmoil
sponsored

Gold demand soars amid global turmoil

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP