One of Australia’s biggest operators of coal-fired power generation, EnergyAustralia, has backed its rival AGL Energy in the shift away from coal power, arguing there are “much better options” – and “a whole lot cheaper” – than extending the life of an old and unreliable coal plant in New South Wales.
As debate continues over whether AGL’s ageing Liddell power station should be kept open past its 2022 use-by date – a position the Coalition has taken in a rather perverse response to the Australian Energy Market Operator’s reports last week – EnergyAustralia’s head of energy, Mark Collette, said the industry’s view on the matter was “very clear.”
“I think there are much better options out there,” Collette told ABC TV’s The Business in an interview on Wednesday night, citing his own company’s plans for more gas power, its own coal fleet, investment in more large-scale renewables, and internet of things solutions like demand management.
“I think the industry has been very clear that there are a number of options to replace Liddell .… I’d be confident that all of the other companies have got irons in the fire,” he said.
Certainly, AGL has; many of which were – again – outlined by CEO Andy Vesey in the wake of yet another meeting in Canberra, with the Prime Minister, deputy PM and energy minister Josh Frydenberg.
“Short term, new development will continue to favour renewables supported by gas peaking,” Vesey said in comments after the meeting on Monday, during which he promised to at least take the idea of waylaying Liddell’s retirement to the AGL board.
“Longer term, we see this trend continuing with large-scale battery deployment enhancing the value of renewable technology. In this environment, we just don’t see new development of coal as economically rational, even before factoring in a carbon cost,” Vesey said in a statement.
AGL has also agreed to deliver the federal government an outline – within 90 days – of its planned actions to avoid a market shortfall once Liddell is retired.
But as Collette noted during the ABC interview, this should not be much of a difficulty for AGL, even if it is unrealistic to expect it to come up with all the new capacity to replace the exiting coal plant.
“I really see it, not so much as a problem, (but) as a race: who’s going to be first to get there and take the space? And that I see as quite an exciting opportunity for the industry,” he said.
Like Vesey, Collette says the idea is to balance a range of more expensive solutions, like new gas power and grid-scale battery storage, with “a whole lot of cheaper options,” like demand response.
“If we can put control systems in some of our customers’ premises, where there’s no impact on them, a computer system just reduces their costs, that’s very low cost,” he said.
“You mix that with the gas, with some battery, with some other things, we’re confident that it will be cheaper than the extension of Liddell. And I think that’s the test that you’ve got to apply. Is it cheaper than doing that? If it is, then it should have better impacts on prices.”
Collette said the company had already started “conversations” with customers around the provision of up to 500MW of demand response, in preparation for the coming summer.
“We’re already working on it now… We’ve got a number of battery projects already in development. We’re doing things, already, with our customers on demand response in preparation for this summer. Not for 2022, we’re doing it now. …By the time we get to 2022… we want it to be old news,” he said.
Just this week, the EnergyAustralia revealed it had launched a pilot program in Victoria, that will allow its solar customers to give their excess rooftop PV generation to the Melbourne Cricket Ground, in exchange for a range of VIP experiences offered by the iconic sports stadium.
The innovative energy sharing scheme gives the MCG – which has an annual electricity demand equivalent to around 4,000 average Australian homes, but which cannot currently install its own rooftop solar system – the opportunity to be powered by renewables, that has been locally generated of the roofs of sports fans and stadium members.
And last week, EnergyAustralia unveiled a key tool in its demand response toolkit, its smart solar energy management system, designed by Australian outfit Redback Technologies, that promises to save the retailer’s customers as much as $1,500 a year on their electricity bills, while giving the utility access to behind-the-meter energy assets.
And while the company remains very attached to the revenue generated by its existing coal-fired power stations, including the relatively young Mt Piper plant in NSW, it sees no future for the sort of new “clean coal” power plants the Coalition is continuing to push for – an agenda of the party’s right wing that appears to have scuppered any chances of the implementation of a Clean Energy Target.
“Industry chases the cheapest way to deliver the objectives of whatever scheme we have,” Collette said, in response to a question about the CET and suggestions it could be wrangled to include new clean coal power capacity.
“I’d be surprised if coal is the cheapest way to get there. We’ve just seen other options work out more economically,” he said.
“The other risk with coal is, if you believe that Australia will meet its Paris obligation, then it’s hard to get up the investment to do coal, just because that moves us away from the Paris obligation.
“So that risk profile on coal makes it very difficult to invest in, and when you couple that with, it’s actually cheaper top get some other technologies going, I’d be surprised if that was the answer.”
