Twice as many taxpayer dollars will be spent on Queensland coal and gas-fired plants this year as they will on installing new renewable energy storage in the state.
Queensland already has the nation’s highest wholesale electricity prices, which experts say is mostly due to its reliance on fossil fuel and lack of energy storage.
Household electricity bills will rise by 10 per cent, while power bills for businesses will soar 20 per cent from July.
Treasurer Cameron Dick will partly offset that by wiping $14.58 off household monthly bills for the next 12 months.
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However, businesses won’t get any support and will likely pass on their extra costs to consumers.
Over the long term, the state government will need to transition to renewable energy sooner if it wants to spare consumers further price pain.
Vast renewable generation projects are under construction, but the state needs about 6.5 gigawatts of energy storage as well.
Mr Dick promised $35 million in funding for a feasibility study on a 5-7GW pumped hydropower storage project in Tuesday’s budget.
Another $13 million will be spent on finalising a study for a proposed 1GW pumped hydro project near Gympie.
However, the three public electricity generators will also spend $480 million with the majority of that propping up ageing coal and gas generation, rather than storage.
Stanwell Corporation, CS Energy and CleanCo will spend about $232.7 million on maintenance, upgrades and spare parts for coal and gas plants in 2022/23.
Stanwell will pour $21 million into the Meandu coal mine and CS Energy will invest $1.2 million on the Kogan Creek coal mine.
CleanCo – originally set up to be a renewable energy firm – will spend $13.6 million on the Kogan North Gas Field, which it jointly owns with Arrow Energy.
The big investment in fossil fuel generation comes with the government expecting to bank dividends from the generators in 2022/23, and for those to rise in 2023/24.
“This trend reflects earnings growth of these businesses, with the current wholesale market environment supporting returns in the next couple of years, and a return to more stable levels over the forward estimates,” the budget said.
Meanwhile, the three generators will invest less than half the amount they spend on fossil fuel generation than they will on increasing renewable energy storage capacity.
About $122.5 million will be spent on two batteries at Chinchilla and on the Darling Downs, which will eventually be able to store about 500MW, in 2022/23.
Queensland will need about 14 times more storage than that to transition to renewable energy and phase out coal generation.
The three generators are also investing about $85.1 million in the Wambo and Karara wind farms, which will eventually generate 353MW of electricity.
In total, the state government will invest $281.8 million on renewable energy and $232.7 million on fossil fuel generation in 2022/23.