The technologies that will slash carbon dioxide emissions from coal-fired power stations are 10 years from being commercially viable, an Australian expert says.

The Australian Coal Association's executive director, Mark O'Neill, said Australia, like other big coal-reliant nations, was putting in a big research and development (R&D) effort on the technologies.

Coal-fired power stations produced about 80 per cent of Australia's electricity.

In New Zealand, coal is a minor fuel for power generation, but it is being increasingly considered because abundant gas supplies from the Maui gasfield are running out.

The state power firms and state coal miner Solid Energy are investigating and proposing coal-fired stations without the express blessing of the Government.

O'Neill said carbon dioxide capture and storage at current levels of technology development would increase the costs of producing electricity from a conventional coal- fired power station by up to 70%.

That made the cost uncompetitive with natural gas as a fuel for baseload stations (producing power most of the time).

"Ideally our objective is to be able to do carbon capture and storage for between 10% and 20% increase in costs."

The storage was only the minor component. The capture was the big issue and cost.

Capture and storage of CO2 was done on a small scale in several industries but not in Australia.

"The way costs of capture have been coming down as the R&D progresses gives us hope that certainly within 10 years you will be able to do this in a way that would be competitive with other energy options for baseload power.

"I don't think there's much doubt about."

It would be easy for New Zealand to pick up the technology.

"I would imagine in 10 years or so this sort of technology would be pretty widely available, O'Neill said.

"New Zealand can be a fast follower."

The challenge was to do carbon capture on a big scale for power stations to substantially reduce CO2 emissions.

The research to do the big scale was "still in the laboratory", O'Neill said.

One of the key new technologies being investigated for the reduction in costs of capture of CO2 was coal gasification.

O'Neill is in New Zealand to acknowledge the New Zealand Coal Association becoming a participant in "Coal 21", an Australian network of industry and research organisations focused on reducing greenhouse gas emissions through sharing information and research on coal.

In New Zealand, coal-fired power stations will have to pay a carbon tax of up to $25 a tonne of CO2 emissions from 2008 as part of New Zealand's commitment to the Kyoto Protocol which Australia has refused to sign.

The protocol's aim is to reduce greenhouse gas emissions worldwide.

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