A plan for new coal power plants, which government ministers say could reduce emissions from coal-generated electricity by 27%, would cost more than $60bn, a new analysis has found.

Achieving the same reduction using only renewable energy would cost just half as much – between $24bn and $34bn – the report found.

The resources minister, Matthew Canavan, and the energy and environment minister, Josh Frydenberg, have been arguing for new coal power plants to be built in Australia.

Last week, Canavan released analysis he commissioned from the industry department, which found replacing all Australia’s coal power stations with the latest “ultra super-critical” coal-fired power stations would reduce emissions in that sector by 27%.

Frydenberg has also raised the conclusions in interviews, and promoted the benefits of coal power.

Neither has responded to questions about the cost of reducing coal-fired power emissions by 27% using the latest technology.



So Dylan McConnell from the Climate and Energy College at the University of Melbourne crunched the numbers, and found that the 27% reduction in the coal sector could be achieved, but it would cost $62bn.

McConnell said at a conservative estimate, achieving the reduction would require 20GW of new capacity. According to the latest estimates from the CSIRO, new ultra super-critical black coal costs $3,100 per kW to build.

“No wonder no one wants to talk about the costs,” McConnell said.

He said $62bn would be enough to build between 35GW and 39GW of wind and solar energy. Because that would produce less electricity than 20GW of coal power, it would not completely replace coal power, but it would reduce its emissions by up to 65%.

And that would amount to an emissions reduction of between 50% and 60% in the electricity sector as a whole.

McConnell found that if the 27% reduction in emissions from the coal generation sector were to be achieved with renewables, rather than with new coal, about 13-19GW of renewable energy would be needed, which would cost between $24bn and $34bn.

He said the scenario proposed by Canavan and Frydenberg would end up with 20GW of highly polluting coal power stations that were unlikely to be retired for decades.

On the other hand, McConnell said, if that money were spent on renewables, it would leave some coal and gas in place, which ultimately would still need to be removed to meet long-term emissions reduction targets.

Neither Canavan nor Frydenberg responded to questions about the costs of building new coal power stations. In a statement, Frydenberg said only that the government was committed to a “technology neutral” approach to meeting emissions targets.

“Arbitrarily excluding certain technologies for ideological reasons will lead to higher cost outcomes,” the statement said.

The Opposition spokesman for climate change and energy, Mark Butler, said: “This analysis clearly shows the government is off on an economically and environmentally irresponsible frolic with their trumpeting of ‘clean coal’.

“As the Australian Industry Group and many others have made clear, replacing our existing coal power with more coal power just doesn’t stack up; either on environmental or economic grounds.

“This is just the latest effort of a weak government to appease its irrational extreme right wing and distract from the fact they’re simply incapable of delivering real policy solutions to our significant energy challenges,” Butler said.

McConnell pointed out that the latest coal-powered fire stations were not at all “clean”. They produced about 700 grams of CO2 for every kilowatt hour of electricity – much more than the 400 grams from new combined cycle gas turbines, and much more than the average produced by OECD countries, 420 grams per kilowatt hour in 2014, according to the International Energy Agency.

OECD countries will need to reduce that figure to just 15 grams per kilowatt hour if the world is to keep global temperature increases below 2C, the agency has said.