One of Australia's largest coal producers has ruled out selling into the domestic market in the foreseeable future, blaming uncertainty arising from the nation's the lack of a comprehensive energy policy.
East coast miner Whitehaven Coal, which on Thursday delivered a 20-fold jump in full-year profit driven by surging prices for its premium thermal coal, currently sells a negligible amount locally and CEO Paul Flynn said there is no intention to increase sales.
Whitehaven exports most of its 21-million-tonne output to countries such as Japan, China, South Korea, Taiwan and India, where it is used in new-generation high-energy-low-emissions (HELE) coal-fired power plants.
Mr Flynn says the recent review of energy security by Australia’s chief scientist, Alan Finkel, started a good conversation on future supply and stability of the electricity system, but other countries had already made decisions about their supplies long ago.
“We are obviously taking and ruminating longer over this type of question than others have done – from a cost perspective, grid stability perspective and reliability perspective HELE plays a big part for them,” Mr Flynn said.
“So, Whitehaven is leveraged to their growth and the pragmatic choice that they have already made, and we have zero exposure to the machinations of Australia’s energy debate.”
According to a recent report by the Minerals Council of Australia, more than 1,100 power plants based on HELE technology are being planned or constructed across Asia.
While six such power stations currently operate in Australia, no new plants are being planned.
Energy company executives have repeatedly blamed the absence of an emissions trading scheme for the lack of incentive to invest in low-carbon electricity and urged Canberra to set up a clean energy target to ensure reliability of supply.
Earlier this year, the federal government indicated it could help subsidise next-generation coal-fired power stations through the Clean Energy Finance Corporation, but has yet to devise a way forward as it grapples with ways to reduce power bills.
Mr Flynn said given the abundance of coal resources, it is extraordinary that Australia has some of the most expensive electricity in the world.
“I am sure, reflecting back, politicians will have to acknowledge that there has been a policy failure here over many years,” he said.