The National Party has abandoned Net Zero, attributing their decision to research done by their own party-affiliated think tank, the Page Research Centre.
The foundation of this research is the energy price modelling done by consulting firm Arche Energy.
We asked Arche Energy about their modelling and the way it’s been used.
📑 The reports
As previously reported by the National Account, the Page Research Centre’s November report claimed coal could deliver cheaper power than renewables.
The report estimated it would cost $10–12 billion to extend Australia’s major coal plants by 20 years, while saying “ultra-supercritical coal plants could supply electricity for around $82 per megawatt hour”.
However, the report left out the $103 billion cost of building new coal plants, a figure from Page’s own earlier modelling.
Instead, it used the performance of new, ultra-efficient plants, but only mentioned the refurbishment costs of old ones, thus making coal appear far cheaper than it really is.
⚡️ Arche Energy
A spokesperson for Arche Energy told The National Account they only modelled the cost of a brand new coal power plant and “did not undertake any work related to refurbished units for the Page Research Centre”.
🙅 Not necessary
When asked if it was standard practice to compare performance costs of new coal plants with the costs of refurbishing Australia’s current coal plants in a level comparison, Arche Energy said:
“In the case of the work completed for the Page Research Centre, it was not necessary to consider refurbished units.”
Yet Page Research decided to have refurbishment as the only build cost presented explicitly in the report given to the Nationals MPs ahead of the party’s decision on abandoning Net Zero.
🤷 No position
We asked Arche Energy if they were comfortable with their modelling being used in this way.
“We have no position on other parties’ uses or interpretations of our modelling,” the spokesperson said.
🖨️ Same answer
The following questions also received the same answer:
Does Arche believe its modelling has been correctly interpreted?
Were you aware that the same modelling, as was used by Coal Australia in their submission to the GenCost report, would be published without the disclosure that was used in Coal Australia’s submission?
🔍 An expert
Energy analyst Tim Buckley, a former long-time managing director at Citigroup who now runs Climate Energy Finance, said modelling is “exceptionally biased”.
He said the modelling assumes coal plants run almost constantly [91%], despite global coal plants operating at half that rate.
Buckley also said modelling ignores that in Australia power prices go negative a fifth of the time due to solar.
🤔 More assumptions
Tim Buckley said it was nonsensical to assume a coal price of US$40 per tonne when export prices are much higher (US$100 per tonne).
The modelling is also based on coal plants lasting 50 years when the historical average is under 43 years. “
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