Next to avoiding runaway global warming and harnessing the economic benefits of clean technologies like ultra-cheap solar, one of the biggest motivators for Australia’s shift to renewable energy is that the country’s remaining coal plants are getting really, really old.
More than half Australia’s coal-fired power fleet has been operating longer than two-fifths of Australians have been alive, a new study has found, with many plants becoming increasingly unstable as they reach the end of their operating life.
The research reveals that more than 60% of Australia’s remaining coal generation is more than 40 years old, with reliability dropping dramatically and driving power outage risks and severe price spikes, particularly during peak summer periods.
The study commissioned by the Climate Council offers this sobering reminder ahead of the upcoming federal election and against a backdrop of consistent messaging from fossil fuel producers and nuclear-advocates attacking renewables.
The analysis, by UK-consulting firm Baringa, draws on real-time electricity market data from the Australian Energy Market Operator (AEMO) collected over the last 1`0 years and used to make projections about energy demand, supply and power system reliability.
It finds that while Australia’s youngest coal-fired generator is 18-years-old, some plants have been in operation since the 70s despite their operational life sitting at around 45 years.
Those within their first 40-years of operation were found to have an average electricity supply availability of 81% – a figure that falls sharply for older units that offer an average availability of 65%.
“The analysis highlights that our ageing fleet is becoming less dependable, and that creating the right environment for investment in replacement capacity – including renewables and complementary dispatchable technologies – is critical if we want to maintain reliability,” the report says.
The findings should come as no surprise given a recent string of outages by coal-fired power stations during periods of high stress, such as during heat waves. These events, Baringa’s analysis found, happened to coincide with periods of high demand, leading to spikes in wholesale electricity prices.
In May 2021, for instance, an explosion at Callide power station knocked several other generators offline, reducing supply and driving up prices with the situation made worse by reduced interconnector activity.
There have since been other more recent periods of vulnerability that were not included in the analysis such as in November, AEMO warned of supply pressures in New South Wales and Queensland owing to a run of outages at generators in both states at a time of high stress on the grid.
Greg Bourne from the Climate Council says the report underscores the transformation taking place in Australia’s energy grid that is forcing aging coal-fired generators to “cannibalise” their operations as fixing them becomes increasingly costly and complex.
“It gets to the point where boilers genuinely do begin to corrode and have problems and they do begin to break down,” he said. “These generators are big, big capital items.
“With enough time, you eventually get to the stage where the site operator says ‘I’ve got six plants in here, I will cannibalise one and drop down to five,’ he said. Then later they say, ‘I will cannibalise that one, and drop down to four. I will not spend the money for a new generator.’
“And at the same time, they are investing in renewable energy like wind farms or large-scale solar. You basically let the plant run down – which is the logical thing to do – no different to a car as it ages.”
Bourne, a former executive with BP Australasia and CEO of the World Wildlife Fund Australia said it was important to push back against claims being made about renewable energy, particularly from industry groups who may be muddying the waters.
The reality, he says, is that most blackouts are caused when a transmission line goes down or a “reliable” baseload generator like a coal-fired power plant is offline, particularly in times of stress.
With Australia now drawing roughly two-fifths of its power from renewable energy, and South Australia regularly hitting periods where it draws all its power from renewables, Bourne says delaying the closure of coal will come at the expense of what the Australian system needs as it moves towards a distributed system for generation and storage.
“The shape of the grid is completely different in a completely transitioned world, it has massive amounts of renewable energy,” Bourne says. “The world then fundamentally changes.”
“We are in transition. If we do not continue investing, day after day, week after week, year after year, one of these coal plants will fail so badly that we will then be left in the dark.”
“The smartest thing to invest in is renewable energy.”
