Energy giant AGL has applied to retain the rights over an estimated 2 billion tonnes of brown coal in the Latrobe Valley allocated to a lower-emissions power plant that was never built.
AGL now says other companies have increasingly expressed interest in developing the coal into export or domestic products and it is best placed to supply it.
The area of coal was one of three allocated in 2002 by the Bracks government. It was given to Loy Yang Power – later bought outright by AGL – to aid the construction of a 1000-megawatt power plant using ”less greenhouse-intensive technology”.
It was later rolled into a second exploration licence in 2005, which expired in December. AGL is bidding to keep the rights to the coal through a new ”retention licence”.
Its pitch to retain the resource comes as the Napthine government considers a fresh allocation of brown coal. It will also soon announce winners of $90 million in grants for projects developing coal in the valley using new technology.
Environmentalists question the drive to develop brown coal because of its high greenhouse gas emissions, even compared with black coal, when burnt conventionally. But state and federal governments have been eager to tap Victoria’s vast unused reserves.
Another of the 2002 allocations that ended up in the hands of Monash Energy – a joint venture between Anglo American and Shell – was reclaimed by the state government in 2012 because the company failed to develop a separate power plant connected to the coal.
A spokeswoman for Energy Minister Nick Kotsiras said Monash had held a fully fledged mining licence over its area, as opposed to AGL’s limited exploration licence. She said AGL met the six milestones connected to its licence.
Environment Victoria campaigns director Mark Wakeham said there was no reason to allow AGL to retain rights over the coal.
”Their promise of a ‘clean coal’ power station never materialised, now it’s time to withdraw the allocation. This highlights the failure of past coal allocations and the folly of any future allocation,” he said.