Power play for $100m grant

International Power, owner of the Hazelwood and Loy Yang B power stations, is asking for government support for a $400 million investment program for Victoria's power sector.
It claims the program could cut the state's greenhouse emissions levels by 300 million tonnes over the next 25 years.
According to documents obtained by The Age, International Power has applied to the Federal Government's Low Emissions Technology Demonstration Fund for a grant of up to $100 million. This would fund the program IP hopes could be rolled out through Victoria's generation industry. LETDF is a $500 million federal scheme aimed at encouraging technological solutions to greenhouse emissions reduction.
The program put forward by IP comes in a series of stages. The first is to fit coal-drying technology to two units of its eight-unit Hazelwood plant, the most greenhouse-polluting generator in Australia. That technology, IP's LETDF submission claims, will cut emissions from its oldest two generation units by as much as 30 per cent, to about 1.2 tonnes of carbon dioxide per megawatt hour of electricity generated. That will reduce emissions below the average for brown coal generation but will still leave them well above the 1.16 tonnes per megawatt for Loy Yang B, the state's most modern brown coal station.
Black coal generators produce emissions of about 0.9 tonnes per megawatt and natural gas about 0.56 tonnes per megawatt. If coal-drying technology was applied to new generators using the most efficient available technology, emissions could fall to 0.75 tonnes per megawatt, IP's submission says.
IP says its coal-drying technology could be rolled out to all four Latrobe Valley brown-coal generators, reducing overall greenhouse emissions by 154 million tonnes over the next 25 years. That represents a reduction of about 8 per cent from emissions of 1.972 billion tonnes over that time.
IP, a British company with over 30,000 megawatts of generation capacity worldwide, has developed its own coal-drying expertise. A project in the Latrobe Valley involving all three generation companies is working on a similar technology.
If IP is successful in its grant request it also proposes to work to introduce geosequestration - depositing carbon dioxide underground in expired gas fields. That could cut emissions from the brown-coal industry by at least half and shave another 150 million tonnes from industry emissions by 2030. The introduction of sequestration could not begin until 2016, IP says.
The Federal Government is expected to release its decisions on LETDF grants at the end of next month. Other companies applying are believed to include geothermal energy operator Geodynamics, Queensland coal generator Stanwell, Victorian solar energy developer Solar Systems and Enviromission, promoters of a plan to build a one kilometre-high tower to generate electricity using convection.
Environment Victoria director Marcus Godhino said: "Both State and Federal Governments are placing too much emphasis on the notion of clean coal. They really should be assisting technology that is here now to reduce emissions significantly."