Electricity polluters seek a free pass

COAL-FIRED electricity producers who emit much of the nations greenhouse gases will ask the Rudd government for free permits to pollute, with a value estimated at more than a billion dollars, to ensure they do not suffer when the federal scheme to combat global warming is introduced in 2010.

“This is going to run into hundreds of millions of dollars, probably over a billion,” the head of the National Generators Forum to ensure dollars, John Boshier, said.

The forum, which represents 21 electricity producers, is to begin lobbying state and federal governments, warning that without compensation in the form of free permits, there was a risk that coal-fired power stations could be shut down and electricity supplies disrupted.

“The fight is about how much the generators can pass on in terms of higher prices of electricity,” Mr Boshier said. “The more we can pass on, the less the compensation will be. But some generators will suffer dramatic loss of sales. The core of my concern is generators will suffer a dramatic loss of sales. The core of my concern is generators becoming unviable, insolvent and even bankrupt – and in the wost case, unable to generate electricity.”

The forum also wants also wants power companies to be allowed to sell their free permits if they decider to shut down a heavy polluting power station.

“They could auction them for money if they wanted to close the power station, and they would still have some financial compensation,” Mr Boshier said.

The call for free permits was attacked by environmental groups yesterday. They said the power companies should buy permits to emit greenhouse gases.

“We’ll be opposing free permits generally and ‘get out of jail cards’ for coal power plants,” said Jeff Angel, director of the Total Environment Centre.

The Federal Government is committed to introducing the greenhouse gas emissions trading scheme, which will put a market price on the permits in an attempt to cut soaring emissions.

Coal-fired electricity producers in NSW and Victoria account for eight of 10 most polluting plants in the country, and will be the hardest hit. Three of the biggest emitters are the NSW Government-owned generators that are about to be privatised.

The NSW Treasurer, Michael Costa, has indicated he wants the Federal Government to grant some free permits. Without them the value of the power stations is expected to fall.

An emissions trading expert, Frank Muller, from the University of NSW, said free permits in the European trading scheme led to windfall profits for power companies.

He said the most polluting power stations in Australia were foreign-owned ones in Victoria, whose shareholders would be the main beneficiaries of free permits.

Marian Wilkinson Environment Editor