Government is wrong to build gas power station in an area 'filled with coal'

The Australian’s Adam Creighton says the government is right to get involved in the energy sector, however it’s gone wrong in choosing to “build a gas power station in an area that is filled with coal”.

His comments come after the federal government’s recent announcement to build a new power station in the New South Wales Hunter region if the private sector doesn’t step up and bring forward a plan to replace the Liddell coal-fired power station over the next seven months.

"We’ve got the situation where there are three large players (in the energy sector) and they all cheer on higher prices, they don’t want more supply, so I think the government does have to get involved,” Mr Creighton told Sky News host Peta Credlin.

“Where I think the government’s gone wrong with this, is choosing to build a gas power station in an area that is filled with coal, with some of the richest coal reserves in the world, in the Hunter Valley.

“The idea that we’re going to get cheap gas, I just think, is a bit fanciful, the cost of extraction in Australia is so much more expensive than it is in the US, it’s about twice as expensive.

“To have a gas plant is going to bake in much higher power prices, it will have to be used quite a lot … and it’s going to be very expensive to run.”