Vales Point power plant given two years to cut emissions or face threat of early closure

The coal-fired Vales Point power plant in New South Wales must cut nitrogen oxide emissions within two years or may face early closure after a ruling by the Environment Protection Authority.

Vales Point Power Plant is owned by Delta Electricity, but in September the company announced that the plant is being sold to Czech family investment group Sev.En Global Investments.

The transaction still needs to be completed, with approval from the Foreign Investment Review Board outstanding.

Vales Point was commissioned in 1978, and its two turbines generate 1,320 megawatts of electricity, accounting for 11 percent of NSW’s energy.

The Vales Point Power Plant is currently set for closure in 2029, but the EPA ruling delivered on 28 October 2022 could bring that date forward to 2025.

Several coal-fired plants in New South Wales have brought their closure dates forward. Origin Energy’s 2000 MW Liddell plant will close in early 2023. The largest coal plant in the state – AGL’s 2880 MW Eraring Power Station, will be closed in 2025.

AGL Energy has also brought forward the closure of its 2220 MW Loy Yang A plant in Victoria to 2035.

Recent state government announcements in Queensland and Victoria look to cut coal generation out of the energy mix as soon as possible.

Carbon Monitoring for Action estimates that Vales Point emits 9.32 million tonnes of greenhouse gases per year from burning coal.

In 2021, the Vales Point Power Station emitted more toxic nitrogen oxide pollutants than allowable under the NSW Protection of the Environment Operations (Clean Air) Regulation 2021.

The operator applied for an exemption granted in December 2021 with a reduction variation and additional conditions imposed by the NSW Environment Protection Agency.

The EPA also stipulated that Delta must “investigate, mitigate and report on” the causes of NOx emissions when the 1320-megawatt generator operates at less than half its capacity.

Nitric oxide oxidises in the atmosphere to form nitrogen dioxide. It is acidic, has an unpleasant odour and is highly corrosive. It is one of the chief causes of yellow-brown smog.

NOx emissions can harm people’s health, contribute to respiratory illnesses and can cause asthma in children and the elderly. It is also harmful to the environment.

Potential energy shortage in NSW

The EPA ruling has fuelled concerns that NSW may face an energy supply crunch in the coming years as coal swiftly exits the market.

Coal supplies NSW with an average of 63 percent of its energy requirements, while the National Energy Market average is 59 percent.

NSW EPA Chief Tony Chappel said the exemption, coupled with the requirement to cut emissions strikes the right balance between safeguarding environmental health and supporting NSW’s need for reliable and affordable energy. 

“A failure to act is no longer an option,” Mr Chappel said.

The NSW EPA noted that environment department modelling found that ground-level concentration of NOx in the community meets national health standards.

The Nature Conservation Council of NSW said that, unlike previous exemptions, this one cannot be extended beyond October 2027. 

But Delta managing director Greg Everett described the objections raised about the time limits for its application for an exemption as an administrative interpretation issue, not an environmental one.

“It’s a two years’ exemption, then we can apply for another period of time. We already have really low NOx emissions, lower than Bayswater and Mt Piper, and we are doing operational changes, and we believe that we will meet whatever the requirements are going to be.”

Delta said it complies with the reduced limits for emissions imposed in December 2021 and noted that Vales Point has lower licence limits for NOx than some other generators in NSW such as AGL Energy’s Bayswater and EnergyAustralia’s Mt Piper plants.

“The decision by the EPA now allows for these conditions and limits to remain in Delta’s Environmental Protection Licence,” Delta spokesman Steve Gurney said.

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Leading Edge Energy is an energy brokerage firm in Australia that specialises in energy cost reduction, solar and storage procurement, electricity and natural gas-use monitoring and reporting for commercial and industrial clients. Follow us on LinkedIn, Facebook or Instagram.