Influx of renewables sees coal power plants run well below capacity, increasing chance of closures

0
27

Coal power plants in New South Wales are running less than 60% of the time due to an influx of renewable energy, increasing the likelihood some could become economically unviable and close earlier than planned.

An analysis by Hugh Saddler, an energy consultant and ANU honorary associate professor, also found coal generation in Queensland had dropped to less than 70% of capacity as more cheap solar and wind came online.

Saddler said the resulting fall in revenue for coal plant owners, and the wear and tear involved in ramping up and down decades-old generators designed to be run constantly, increased the likelihood of breakdowns and early closures in the years ahead.

AGL’s Liddell coal plant is scheduled to close by early 2023 after the company resisted a campaign by the Morrison government for it to extend its life. Saddler said the fall in demand for coal over the past two years suggested other plants that have yet to confirm closure plans could follow.

He said coal could be running at 50% capacity in NSW by 2022 and 60% capacity in Queensland by 2025 on current trends.

“Ageing coal power stations like Liddell will find it increasingly difficult to stay afloat if they are only being used half the time, and that is the direction we appear to be heading in NSW in the next two years,” Saddler said.

“If there are extended breakdowns, as we had at Loy Yang A in Victoria last year, it may not be economic for owners to keep a plant going.”

Saddler said it underlined the need for better national planning for the future of the electricity grid, including timing investments in new renewable generation and storage to prevent a surge in power prices like that experienced when Victoria’s Hazelwood plant shut in 2017.

The Australian Energy Market Operator this year found solar and wind were the cheapest forms of new electricity generation, and that the national grid had the technical capacity to run on at least 75% renewable energy and could at peak times reach this level by 2025.

Saddler said the Energy Security Board, which reports to federal and state energy ministers, was considering future planning but there had been a gap in national leadership since the Coalition dropped plans for an overarching energy policy when Scott Morrison replaced Malcolm Turnbull in 2018.

The analysis is included in Saddler’s monthly audit of national energy emissions published by the Australia Institute, a progressive thinktank. The institute’s climate and energy director, Richie Merzian, said it showed AGL was making the correct call to shut Liddell and replace it with cleaner energy.

He noted the government appeared to have accepted Liddell would shut – the energy and emissions reduction minister, Angus Taylor, acknowledged it in a tweet last week – and should explain why it was yet to release a report by a taskforce set up to advise on how its closure would affect NSW’s power supply.

The Australia Institute analysis follows the release on Monday of the latest national greenhouse gas emissions data. It found total emissions were down 1.4% in the year to March due to the rise of renewable energy and the devastating impact of the drought on agriculture. Emissions from industry, particularly gas production, continued to rise.

Taylor’s office also released an early estimate of the impact of the coronavirus pandemic shutdown on emissions on the June quarter, suggesting they could be 8% lower than a year earlier, with pollution from transport likely to be well down.

A recent analysis suggested that Australia’s greenhouse gas accounting underestimates national emissions by about 10%, largely due to a failure to properly recognise the impact of methane released during gas production.

The Morrison government has been championing a gas-led recovery from the Covid-19 pandemic. Leading scientists last week released a letter to the chief scientist, Alan Finkel, warning his advocacy for increased use of gas-fired electricity was at odds with the Paris agreement and not consistent with a plan to secure a safe climate.

Independent MP Zali Steggall on Monday said she planned to table a previously announced private member’s climate change bill in Parliament on 9 November to coincide with what would have been the start of the UN climate conference in Glasgow had it not been delayed due to the virus.

The bill, which has the support of other independents, some leading scientists and the Business Council of Australia, would set a national goal of net zero emissions by 2050, a target rejected by the Morrison government. Steggall said it would create an “opportunity to rebuild from the Covid-19 crisis in a sustainable way, future proofing our jobs and economy”.

Saddler’s audit found the emissions intensity of the national electricity market, including the five eastern states and the Australian Capital Territory, had fallen 25% below its historic maximum in 2008.

The move from coal to renewable energy has been more rapid in the southern states than in NSW and Queensland. The proportion of wind and solar in Victoria and South Australia has almost doubled in the past four years to reach 29%, while coal’s share fell from 72% to 53%.

By comparison, NSW and Queensland get just 14.5% of their energy from wind and solar. But that was expected to grow as the states promised new renewable energy zones that would put further pressure on coal. Renewable energy supplies about 25% nationally.

LEAVE A REPLY

Please enter your comment!
Please enter your name here