The Advanced Lignite Demonstration Program (ALDP) was formally concluded earlier this week, unfortunately without achieving its objectives.
Each of the successful applicants has fallen by the wayside, with Coal Energy Australia (CEA) recently capitulating.
It’s a cautionary tale, highlighting just how hard it is to pick winners.
Despite a robust evaluation process and best intentions, the successful applicants, for one reason or another, didn’t proceed.
Program failure can reflect poorly on other technologies. And, in fairness, there have been decades of effort and hundreds of millions in government and industry funding aimed at drying or high-value utilisation of brown coal. Without much commercial success.
By all accounts, we just missed out on selection back in 2014.
Working against our application for funding under the ALDP was the absence of appropriate export infrastructure. While we could demonstrate our Coldry technology, to achieve subsequent commercial rollout would have required up to $5 billion worth of rail and port infrastructure to get the desired 20 million tonnes of product to market each year. The ALDP selectors focused on what they believed to be higher-value products focused on markets other than electricity generation.
Despite not being selected to receive a grant under the ALDP, we were subsequently selected by CEA to supply dry coal into their project, confirming our position that we were the most cost-effective drying solution. We went through a rigorous university-led benchmarking program and robust, transparent economic modelling to satisfy CEA that we were the coal drying technology for them. It’s a shame they were unable to proceed.
Nevertheless, per previous announcements, we’ve advanced since then and remain focused on delivering our integrated Coldry-Matmor project in India.
In addition, we’ve commenced a feasibility study for a proposed large-scale (170,000 tonnes per annum) Coldry demonstration project at Yallourn power station.
The difference between our proposed Victorian project now compared to that under the ALDP is the commercial focus. Our development of Coldry engineering partners in India also helps make the Victorian plant more affordable. We can fabricate the bulk of the plant in India, ship it over, then use skilled Australian labour to construct. A pragmatic balance.
Our current proposal seeks to support the local market (Vic/Tas) for industrial heat applications, providing a cost-effective alternative to escalating gas prices. If we don’t subsequently expand beyond the initial demonstration plant, we’d have a sound, niche business. Whatsmore, there’s no reason for renewables advocates to cry foul given Wind and Solar aren’t suitable for such process heat applications.
Then there are the high-value applications that don’t involve burning wet brown coal to make electricity; fertiliser, hydrocarbon liquids and gas, char and activated carbon and most recently, hydrogen.
What do all these have in common? We need to dry the coal first.
The other thing these processes have in common; waste heat.
Demonstration of Coldry in Victoria could act as a potential gateway enabler for these higher value applications.
Coldry demonstration would also support the development of our fledgling hydrogen production process; COHgen.
We support the recent decision by the Federal and Victorian State governments to help fund the $500 million hydrogen pilot project in Victoria’s Latrobe Valley, led by Kawasaki Heavy Industries. We’ll seek to do our best to provide appropriate solutions to future hydrogen industry development.
Coldry could also be used to feed a HELE coal-fired power station if energy policy permitted, though we suspect that path will continue to experience political headwinds. If it becomes an option, we’re ready to help.
Underlying this, energy policy remains highly politicised. Our energy costs – electricity and gas – have escalated.
As Chris Kenny, Associate Editor over at The Australian noted last September:
The largest single factor in the power crisis is the renewable energy target demanding 23 per cent of electricity be supplied by renewables, which are subsidised by consumers. When the renewables (mainly wind turbines) supply power they can do so at zero cost, thereby undercutting the viability of baseload generators and hastening their demise. The trouble is renewable energy can’t supply all our needs at any time and, crucially, is intermittent and unreliable. So we still need all of the baseload and peaking generation.
Under this formula we must either be caught short of supply or need to almost double our investment in energy so every megawatt of renewable energy is backed up by storage or thermal generation.
And just when we need more rapid-response gas generation to back up wind energy we have a gas supply/price issue courtesy of long-term export contracts and state restrictions on exploration and exploitation. What a mess.
Conversely, the below article in The Age which reports on the demise of the ALDP quotes renewables advocate Environment Victoria:
“The failure of the Advanced Lignite Demonstration Program to produce even one viable brown coal project should be a signal that it is time to move beyond this polluting and outdated resource.”
Let’s paraphrase that in the context of Wind and Solar:
“The failure of programs such as the RET over the past 20 years to produce even one viable Wind or Solar project should be a signal that it is time to move beyond expensive, intermittent technologies.”
Renewables have certainly become cheaper but still remain uncommercial despite some $30 billion of support, requiring an additional $30 billion in subsidies between now and 2030 to prop them up.
The ALDP may be gone, but there are still ways to utilise Victoria’s world-class lignite asset, and we’re keen to play our part.
Browned off: $90m ‘clean coal’ program ends as final project collapses
18 April 2018 | The Age | Royce Millar & Ben Schneiders
The last of a long list of government-backed “clean coal” projects has fallen over, with the Treasurer reluctantly confirming the end of a $90 million program.