Environmental law group has accused Delta Electricity of underreporting emissions at its Vales Point power station and breaching licence conditions
September 7, 2017 — The only Australian company with a stated potential interest in buying and keeping AGL’s ageing Liddell coal-fired power station open beyond 2022 is facing a number of allegations of environmental mismanagement.
AGL’s chief executive, Andy Vesey, has told government ministers AGL would consider selling Australia’s oldest coal-fired power station – near Muswellbrook in New South Wales – to a “responsible buyer”.
While that claim was put in doubt by an ASX announcement from AGL – saying it “has made no commitment to sell the Liddell power station nor to extend its life beyond 2022” – Delta Electricity has said it was interested in buying the station and that it was prepared to undergo a due-diligence process.
But how responsible Delta Electricity is has come under question in a recent report by environmental law group Environmental Justice Australia (EJA).
In a report released last month, EJA detailed a litany of alleged environmental damages caused by Delta Electricity in its operating of the Vales Point coal-fired power station on Lake Macquarie, 130km south-east of Liddell.
EJA claimed Delta Electricity appeared to be underreporting its emissions of particulate pollution, which is responsible for hundreds of premature deaths in Australia each year, to the National Pollutant Inventory.
The smallest and most dangerous particulate pollution, called PM2.5, was reported by Delta to be just 12,000kg during the 2015-16 financial year.
“This is unlikely to be accurate,” the EJA report stated. “Eraring, Bayswater and Liddell all reported emitting more than 170,000kg during the same year, 17 times as much as Vales Point.”
Delta Electricity told the Guardian those figures reported to the National Pollutant Inventory were also used to calculate the fees it pays the NSW government for the pollution.
EJA noted the issue was particularly important for the Vales Point power station since it was located so close to people’s homes.
“The Vales Point power station is arguably Australia’s most urban power station,” the EJA report said. “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.”
The Delta company secretary, Steve Gurney, told the Guardian in July the figures had been independently obtained and reported to the regulator in accordance with the company’s licence conditions. “From our perspective, that is what it is,” he said.
In a statement, Delta Electricity said EJA’s claims were inaccurate, saying “the testing is conducted in accordance with the EPA’s [Environment Protection Authority’s] required methodology”.
“Environmental Justice Australia are a Victorian-based environment group with an anti-coal platform who want to shut down coal-fired generators now. This would see the lights go out, cost industry jobs and decimate the NSW economy,” the statement said.
The EJA report also found that in just four years to 2013, prior to Delta Electricity’s purchase of Vales Point in 2015, the power station’s then-owner – the NSW government – had reported nine breaches of licence conditions in its annual compliance statement to the NSW EPA. But since Delta Electricity took over, 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 report said.
“This is supported by the fact that an EPA audit of just the power station’s coal ash ponds, completed in October 2015, found eight instances of noncompliance (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.”
James Whelan, a researcher at EJA who authored its report, said he couldn’t comment on whether Delta Electricity was a responsible buyer of AGL’s Liddell power plant, but he said: “The question we asked was whether they were a good neighbour. We reached the conclusion that of the 10 powers stations we looked at, Vales Point was the least qualified as a good neighbour.”
EJA also documented evidence that Vales Point 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 Electricity denied there was any breach of its licence, saying the claims were “a gross exaggeration by a group of anti-coal activists”.
“On this occasion, no dust left the stockpile site and there was no licence non-compliance,” Gurney said in a statement.
The co-owner of Delta Electricity, Trevor St Baker, also made waves earlier this year when the energy retailer he co-founded, ERM Power, chose to pay a shortfall fine, rather than surrender the required number of renewable energy certificates. St Baker used the move to attack the renewable energy target, saying it wouldn’t be met – a claim not supported by most analysts.
In Canberra, there was continued pressure on AGL to keep the Liddell plant open beyond 2022 or sell it to someone who would. The deputy prime minister, Barnaby Joyce, indicated there was interest in buying Liddell.
“I know more buyers, yes,” Joyce told Sky News. “There are people out there who will buy Liddell.”
The prime minister, Malcolm Turnbull, has so far refused to say what taxpayer support could be offered to prospective buyers to keep the ageing plant open.
“We don’t need to consider that at this stage. The important thing is to ensure we have that 1000MW [shortfall] covered,” Turnbull told 3AW radio.
“Keeping Liddell going for another five years is one obvious way of doing it. AGL says they want to sell it, that they want to get out of it. They’ve said they would be prepared to discuss selling it to a responsible party. Another private-sector energy company has said they’d be interested in looking at it. So I think it’s too early to say what the precise role of government would be.”
AGL’s position has attracted the ire of the Coalition and the mining sector, as well as large energy consumers.
Martin Ferguson, the former Labor minister turned energy lobbyist, said Turnbull deserved full marks for pressing to keep the plant open.