This is the second coal-fired power plant closure announced in the last few weeks, following an announcement that the Anglesea coal-fired power plant in Victoria is to close. Both are relatively small plants. So much for the "profitability" of coal, and "Coal is good for humanity".
The Northern plant has a capacity of 2 x 260 MW (of which usually only one unit is running), and Anglesea 1 x 150 MW. The costs of the 440 workers at Northern and about 200 at Leigh Creek need to be spread over a relatively small amount of power production, plus there are the costs of transporting the coal by rail which adds to the costs relative to mine-side power stations such as Loy Yang and Hazelwood in Victoria.
Some other considerations
- the short remaining life-span of the mine means that the extracted coal would be of progressively lower quality. By 2018 there would be only 8 years of coal supplies left in the ground.
- to compensate for lower quality some higher-quality coal may have been required for blending from the nearest source of high-quality coal (the Ulan mine in NSW)
- eventually another source of coal would need to be developed, which would require further investment
- Alinta were hoping for a increase in the costs of their gas-based competitors as the LNG export plants compete for east coast gas, but this doesn't seem to be happening because of a glut of seaborne LNG.