Environment groups say an ageing coal-fired power station in New South Wales that sold for hundreds of millions of dollars may be operating in breach of the state’s clean air laws.
This week Delta Electricity announced it sold the 1,320-megawatt Vales Point power station, located in the state’s Hunter region, to Sev.en Global Investments, owned by Czech billionaire Pavel Tykač.
The sale reportedly netted Delta $200m despite the company paying only $1m to buy it from the NSW government in 2015, prompting the state’s opposition to accuse the Coalition of having “dudded” taxpayers over the sale.
On Tuesday the NSW energy minister, Matt Kean, declined to weigh in on whether the sale was appropriate, but said the government would “remain vigilant” over the plant operations.
“Whoever owns these assets, I want to make sure they are acting in the interests of the citizens of this state, not for vested interests,” he said.
Kean confirmed exemptions granted to Delta during the purchase – including a cap of $10m on rehabilitation likely to cost hundreds of millions of dollars – would remain in place despite the sale.
In public comments this week, the current owner of Vales Point, Trevor St Baker, indicated that Sev.en may seek to keep the station open beyond its current closure date of 2029, saying the company had “shown a commitment to the sector and an ambition to expand, both in Australia and globally”.
That, environment groups say, has given new urgency for the NSW Environment Protection Authority to clarify the legality of a pollution exemption provided to the plant late last year.
Environment Justice Australia and the Nature Conservation Council have questioned whether the renewal of a licence granting the plant operators exemptions from some pollution standards for nitrogen oxide is valid because, they say, Delta applied for the renewal after the deadline.
Granted in December last year, the exemption allows the operators to emit a higher level of nitrogen oxide than usually allowable under clean air regulations.
It has previously been reported that the EPA briefed the state’s environment minister, James Griffin, over concerns about the exemption, as well as seeking approval to pay a senior barrister for advice on the legality of the exemption.
At a budget estimates hearing last month, Stephen Beaman, a senior regulator at the EPA, said the agency would be “finalising its position very shortly” on the legality of the exemption.
“We know that the emissions meet the National Environment Protection Measures for NOx, but we’ve got the environment group’s position. We’re carefully considering it and it’s an important decision to make and we’ll be making that public shortly,” he said.
While Delta secretary Steve Gurney said the sale of Vales Point was “a completely unrelated commercial matter” to the emissions issue, Nature Conservation Council chief executive, Jacqui Mumford, said the new owners “should be required to slash the station’s pollution so that people across NSW can breathe healthier air”.
“The power station doesn’t currently have a valid air pollution licence. It’s like selling an unregistered car. The EPA has the chance to take a good look at this before issuing the new owners with a licence to pollute,” she said.
Environmental Justice Australia solicitor Jocelyn McGarity said there were “serious concerns” the licence conditions were “unlawful” and that the plant should not be allowed to operate beyond 2029.
“If Vales Point power station is allowed to operate beyond 2029, we know it will have continued serious consequences for the health of the community. It’s also unknown how the sale will impact the rehabilitation responsibilities for the power station ash dumps,” she said.
On Tuesday Kean said he was still expecting the plant to close by 2029, saying the state had “plans in place to ensure that the capacity of Vales Point is replaced by that time”.
The EPA has been contacted for comment.