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26 May 2024

Financing woes hit power plants in Australia

By Reuters

Australia's electricity sector faces a A$22 billion (Dh69.73bn) headache as it seeks to refinance debt over the next two years, with uncertainty over efforts to put a price on carbon pollution hurting investment, ratings agency Fitch said yesterday.

About 80 per cent of the Australia's power comes from burning coal, a major source of planet-warming carbon dioxide pollution and for decades and cheap and easy source of fuel for the nation.

The government's failure to win support for a comprehensive emissions trading scheme has raised questions about value of many power generation assets and the future costs operators will face.

While it is widely accepted some form of carbon pricing will be enforced, questions remain on the timing and final shape of such laws, particularly compensation for polluting generators.

The government's carbon pollution reduction scheme laws were introduced to parliament yesteray for the third time but look set to be rejected again in a hostile Senate, where the government does not have a majority, in coming days.

Fitch said coal-fired power stations were most under threat.


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