The Federal Government's top climate change adviser released a discussion paper on Carbon Trading on March 20 that demonstrates the folly of Western Power pursuing the Eastern Terminal Substation.
Professor Ross Garnaut, appointed by Prime Minister Kevin Rudd to oversee the implementation of a carbon trading scheme in Australia, has warned electricity hikes are inevitable under emissions trading. Coal-fired power stations spew out more carbon dioxide emissions than any other form of electricity generation. A carbon trading scheme, which effectively puts a price on greenhouse gas emissions, will therefore increase the price of producing electricity from coal-fired power stations.
The intent of such a scheme is to make polluters pay, and to also make less emissions-intensive options more cost effective. For example, renewable technologies such as solar and wind will become much more cost-competitive under an emissions trading scenario. Even gas-fired power stations, which produce roughly half the CO2 emissions of their coal-fired equivalents, will become more competitive.
At the moment, there is a gas-fired power station near Wanneroo that lies idle much of the time due to its high cost. It currently only gets "fired up" during periods of high demand. This will all change once the Rudd Government introduces the carbon trading scheme in 2010.
The sole purpose of the Eastern Terminal Substation is to reinforce the transmission of coal-fired electricity from Collie to the main electricity consumers in metropolitan Perth. It assumes the continued high level of usage of coal-fired power to meet the electricity needs of Perth. However it fails to take into account the impacts of a carbon trading scheme which will make the use of electricity from gas-fired power stations and renewable sources economically preferrable to coal-fired power.
Spending tens of millions of dollars to build the substation and associated infrastructure on the cusp of the introduction of the carbon trading scheme is a gross misuse of public money. Aside from the many environmental concerns of this project, it is also the wrong option from an economic standpoint.