New high-efficiency low-emission (HELE) coal-fired power plants have a role in the energy mix and the government is prepared to intervene in the market, Josh Frydenberg has said.

The energy and environment minister told Sky News on Sunday that new coal plants “need to be considered” alongside other sources of baseload power, and the government could intervene if the market failed to deliver the “best possible outcomes” in the electricity market.

The comments leave open the possibility of government intervention in favour of coal, despite Frydenberg saying in July that the government would only support new coal power plants “if the market supports that”.

Asked about the Finkel’s review’s recommendation for a clean energy target, Frydenberg said there was no “need to rush this decision”, because a CET would not come into force until 2020.

In June the Finkel review called for a CET as a means to lower energy prices and achieve an emissions reduction target of 28% on 2005 levels by 2030 in the electricity sector.

The government has said it is “too early” to say if it will adopt the policy, although Malcolm Turnbull has left open the option of considering an alternative.

On Sunday Frydenberg said the purpose of the CET was “to try to integrate climate and energy policy and to provide a level of investment certainty for generation investments that have a 20, 30, or 40-year lifespan”.

He said a CET was “a live issue and a live option for the Coalition”, but it would first receive a report back from the Australian Energy Market Operator in a few weeks’ time about the amount of dispatchable, baseload power needed in the system.

Asked if coal would play a role in generation, the energy and environment minister replied: “Certainly existing and new coal does have a role to play in our energy mix.”

“Low emissions high efficiency [HELE] coal fire power stations … do have a role to play in the energy mix going forward.”

When it was suggested that there was no appetite from investors to build a new HELE coal plant, Frydenberg at first insisted it will be “up to the market” to decide.

“Once we have the level of investment certainty that we all want for our energy system going forward, then the market will be best placed to work out the role of a HELE coal-fired plant, or another form of gas generator or a form of renewables with storage.”

“If we can get affordable baseload power with a HELE plant or with renewables and storage then we’ll take it.”



Frydenberg has been under pressure from repeated public lobbying by senior Nationals to bring more coal into the system.

Asked to reconcile the contradiction of saying the government believed new coal plants had a role but it was up to the market to decide, he replied: “The government stands ready to ensure the best possible outcomes in the marketplace if the market itself can’t deliver that.”

He said a HELE coal plant “does need to be considered”, as well as new gas plants and renewable energy with storage.

Frydenberg noted renewable energy was supported by the renewable energy target, and lamented the fact that no gas power stations had been built since 2010 and no coal stations since 2007.

“If we’re going to get more thermal generation, we need to look at all the options available to the government.”

Frydenberg said the three causes of higher electricity bills were higher gas prices, investment uncertainty and closure of coal power plants.

He trumpeted government efforts to pressure gas companies to keep more supply for domestic use, saying they had already started to flow through to the spot price, which has fallen from its highs at the start of the year.

Asked if the government could make changes to the proposed CET, Frydenberg said it was “too early to say … other than to say that we do need a mechanism to integrate energy and climate policy”.

Frydenberg said he was focused on “outcomes”, and noted that the Finkel plan would both reduce the trajectory of Australia’s greenhouse gas emissions but also reduce prices overall.

He said the government was “unequivocal” that affordability is its number one concern and it is pursuing a “technology neutral” approach.