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Coal no longer the cheapest energy source, says Gupta


The UK billionaire who bought South Australia’s troubled Whyalla steelworks says Australians are yet to grasp that new coal-fired electricity is more expensive to produce than solar power.

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Sanjeev Gupta is investing $2 billion in clean energy and steel production in South Australia and told Guardian Australia on Monday, “It’s still everybody’s perception that it is cheaper to make power from coal than it is from renewables, and it is no longer the case.”

“It was the case not long ago, but it’s no longer the case, and we will prove it,” he said.

The British industrialist – whose company GFG Alliance bought the Whyalla plant in August last year – reaffirmed in May his promised investment strategy in South Australia, including a 90 megawatt pumped hydro power plant, large-scale solar power production at Whyalla and the development of a 100-megawatt lithium-ion battery.

Last week, the Australian Energy Market Operator said a combination of solar, wind, storage, gas and transmission investment could produce the 90 terawatt hours of energy needed each year to offset power from retiring coal-fired generation.

“If it was cheaper to make new coal plants, I would argue you should invest in that technology. These HELE (high efficiency, low emissions coal) plants are incredibly efficient these days and their emissions are really quite impressive,” he told Guardian Australia.

“But it should just turn on what’s more competitive. If you can make power from the sort of things that we’re doing and it can compete against a new coal plant, then why would you not do that, right? It’s obvious.”

He also said Australia was “well behind” other nations which are moving towards a cleaner economy.

Energy Minister Josh Frydenberg last week said the AEMO report did not preclude a new coal-fired power station being built – as is being advocated by some Coalition MPs – but showed the declining cost of renewables and storage.

“It’s reflecting what is a reality in the market, which is renewables coming down dramatically in price, and that’s led to their increased uptake across the market, and we need to put a greater emphasis on storage and interconnection,” Frydenberg said.

Frydenberg will meet with his state and territory counterparts in Sydney on August 10 to discuss the government’s planned National Energy Guarantee.


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