Wood expects both Victoria and NSW to cut at least one more deal to delay an impending coal closure but said governments should not continue Victoria’s practice of keeping the financial arrangements confidential. He nominated AGL’s Bayswater plant in the Hunter region, which has a scheduled closure date of no later than 2033, as a potential target for government support.
“I also wouldn’t be surprised if the government does something with Loy Yang B in Victoria,” he said.
Coal closure dates in Queensland can be directly controlled by the state government, which owns the generators in its jurisdiction.
To accelerate the build-out of vital new transmission infrastructure to link up often-remote wind and solar power regions to Australia’s major cities, Wood said governments must also urgently agree on “coordinated, pragmatic actions … to remove roadblocks and bottlenecks to new projects proceeding”.
In addition to ensuring a smooth transition away from coal, adding more renewable energy to the grid is also a key plank of state and federal targets to reduce the output of planet-heating greenhouse gas emissions.
The Albanian government has set a legally binding target to cut emissions by 43 percent by 2030. To do so, it aims to reach 82 percent renewable electricity supply by the same deadline. Victoria is chasing 95 per cent renewables by 2035 and NSW is aiming for 70 per cent renewables by the same deadline.
However, Grattan argued that the seemingly counterintuitive move to prop up coal might help the clean energy switch in the long term, warning that public support for policies to cut emissions by reducing fossil fuels will wane if power prices rise and reliability falls.
Wood said the 2018 ditching of the National Energy Guarantee was a prime example of the energy chaos that contributed to the lack of preparation for coal plant closures.
The scheme was intended to coordinate the rise of renewable energy with dispatchable power from large-scale batteries, pumped hydro, or gas peaking plants, which can be deployed to rapidly fill gaps when solar and wind power aren’t available. However, the former Coalition government abandoned the policy after the party split over the role of fossil fuels.
The National Energy Guarantee followed a seismic policy shift in 2014 when the Abbott government abandoned the carbon pricing scheme imposed by the Gillard government in 2012.
Most recently, state and federal governments could not form a consensus on how to back up intermittent energy supplies from wind and solar farms, with Victoria agreeing to the use of gas-fired power in publicly funded schemes.
Wood said Australians would “not forgive our political leaders if they mess up the post-coal era”.
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Tags: Payments coal plants urgent reform needed renewables switch
