Australia should close one Hazelwood-sized coal plant a year, says Infigen | RenewEconomy

Australia should close one Hazelwood-sized coal plant a year, says Infigen

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Infigen Energy CEO says closure of 1500MW a year of coal plants, starting this year, best way to meet Australia’s climate commitments.

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The CEO of Australian renewable energy company, Miles George, has called for the closure of 1500MW a year of Australian coal-fired power plants, as the best way to meet Australia’s climate commitments, including those it signed up to at the 2015 Paris conference.

Speaking in a panel discussion at the Australian Energy Week 2016 conference in Melbourne on Tuesday, George said that while bipartisan support was key to renewables growth, shutting down a coal plant like Hazelwood, in Victoria’s La Trobe Valley, would kickstart the transition to clean energy that was key to keeping global warming well below 2°C.


“The biggest single factor in our sector is policy stability and bipartisan support. They’re the two key things that are crucial for investors who are investing in 30 year assets to actually make an investment decision and for lenders to make decisions,” George told the conference.

“Having said that, I certainly agree with (Powershop CEO) Ed (McManus), a good start would be closing Hazelwood.

“But I would suggest maybe 1500MW this year – Hazelwood is 1600MW) – 1500 next year, 1500 the year after that; 1500MW each year of orderly coal-fired closure would be a great plan towards getting to zero net emissions by 2050,” he said.

Owned by French company Engie, which is in turn part owned by the French government, Hazelwood is widely recognised as the most polluting power plant in the OECD. It is also the generator of up to 25 per cent of Victoria’s energy needs.

Last month, however, Engie CEO Isabelle Kocher told a French Senate committee that the company planned a gradual withdrawal from coal-fired power generation in coming years, and that included the potential closure of Hazelwood.

“For the Hazelwood plant, we are studying all possible scenarios, including closure, or a sale if the state of Victoria tells us that it cannot meet power generating needs without this plant,” she said.

There is around 27000MW of coal fired power in Australia, of which between 7000 and 9000 is considered surplus to requirements, thanks to lower than expected demand, the high uptake of rooftop solar, and increasing use of energy efficient appliances.

Some analysts suggest that Hazelwood may have to be closed before 2020 following the recent announcement by Victoria to target 25 per cent renewable energy by 2020, and to lift that to 40 per cent by 2040.

But George, whose company’s major interest has been in large-scale wind energy development, said he still believes centralised, large-scale generation will continue to have a major role to play in Australia, especially in the next 5-10 year timeframe.

“Even if (rooftop solar) quadrupled in 10 years, so we got 20GW, say, in 10 years, and even if the commercial application went from 500MW to 10GW in 10 years… it’s still not actually a very big proportion of total generation requirements.

“You’re still going to have the bulk of electricity generation required coming from more centralised …generation,” he said. “The change that is going to happen there is the mix of technology. It’s going to be more renewable, less coal-fired plant.”

George also skewered the idea that so-called clean coal technologies like carbon capture and storage could be part of the low-carbon energy equation in Australia.

“The big barrier to carbon capture and storage … is cost. It’s just not competitive with renewables,” he said, in response to an audience question about why low-emissions fossil fuel generation weren’t being considered alongside renewable energy technologies.

“We’re not frightened about it as a competing technology… we’ve got no moral resistance to it, it’s just not viable.

“Even the coal industry doesn’t support carbon capture and storage, as evidenced by the fact that you can only really point to one plant in the world that actually does it seriously.

“The barriers to deployment of CCS and nuclear are not about policy or other issues, it’s just about cost – it’s way out of line.”

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  1. john 4 years ago

    Closing this plant means that another has to be commissioned.
    Australia with the best solar resources of any country mainly because the countries closeness to the equator ensures it has good solar radiance lends it to adopting a solution.
    So solar and storage, which ever your choose possibly molten salt.
    Possibly pumped hydro, however Australia being such a flat country these sites will be few and hard to find.
    The situation is apparent that old 1880 tech does not meet the requirements of 2016 so let us put our minds to the best method of replacing the industrial revolution technology with best practice in this century.
    The challenge is to find the best method to harvest the now energy source the sun not the stored energy source the coal, which is stored energy from the sun, in this day and age.

    • Peter F 4 years ago

      Closing a coal plant does not mean that another fossil fuel plant has to be commissioned. There is between 7 and 9GW of excess plant on the grid. We need about 2.5GW of renewables per GW of coal closed. If we build 2GW of renewables per year, as we have done in the past, then after 10 years we have built about 20GW. (India plans to build 100GW in seven years) That would mean that we could close say 8GW of excess power and replace another 8GW of existing power. That very neatly ties in with 1.5GW per year of coal retirements.

      Then there is the effect of energy efficiency. Underlying demand is falling about 1% per year and would fall much faster if we adopted European or Californian energy efficiency standards. Thus in 10 years time we should be able to reduce another 3GW or so.

      At some point the issue becomes storage/load shifting. While batteries are still very expensive, we can do a lot to manage demand before we need large scale deployment of batteries. For example requiring a 30% increase in size of hot storage hot water services and powering them from direct solar or solar powered or grid controlled heatpumps would allow moving about 30GW.hrs of demand. We can also change the operating regimes of hydro so it is used more as back up to wind and solar rather than the primary power source. Also some hydro schemes can be upgraded with variable speed or enlarged turbines so that peak hydro capacity can probably be increased to about 10GW. All this before any new dams or pumped hydro is considered.

      If pumped hydro is required, there are literally thousands of sites around the country is feasible where ponds can be built above or below existing water bodies. In 2012 Roam consulting using a very limited parameter set identified 68 sites with power capacity of 34GW and storage capacity of This is far more than we need.

      Peak demand is currently 35GW which occurs on hot sunny days which are almost always accompanied by hot North winds. At such times even if there are low breezes we can count on a minimum of 8GW of wind, solar and hydro and biomass today, in most cases much more.

      If we invest in load shifting and continue energy efficiency programs peak demand will be below 30GW. With 20GW of new wind and solar and 1-2GW of augmented hydro, renewable contribution will be a minimum of 14GW in 10 years time. adding 4GW of existing gas that leaves a gap of 12GW from coal or storage. In the unlikely event that it was all from pumped hydro we still only need 1/3rd of the capacity ROAM identified.

      The net result is that between 10 and 15 years time we can close all the coal plants while keeping existing gas The cost of about $5b per year in investment is roughly the same as we spent in the last decade upgrading the grid.

      As the cost of the technology is falling monthly and the economy is growing. the relative cost of going from here to a fully renewable grid is probably about 60% of what we have spent on grid upgrades since 2002

      • john 4 years ago

        you have no problem with me
        If we can find and utilize those hydro pumped storage sites lets do it.

        However i do honestly think we do have a lot in a flat land like Australia.
        You mentioned
        68 sites with power capacity of 34GW and storage capacity of
        Yes well let us exploit those sites i totally agree.

        • Peter F 4 years ago

          The point is we need to make the transition at the lowest cost consistent with reliability. At the moment without a carbon tax and excess capacity on the grid it is it is impossible to justify additional storage except in some cases where it reduces congestion in the grid. Pumped hydro is very unlikely to do that.

          A second point is that energy efficiency, power to heat, waste to energy and grid controlled electric vehicle charging are much cheaper than electricity storage so we don’t know how much electricity storage we will eventually need on the grid even with current technology.

          The further complication is that new wind turbines are reaching higher and higher capacity factors while falling in price. The NREL in the US predicts that in 10-15 years time wind turbines averaging 60% capacity factor will be viable over most of the continental US, so the same is probably true of much of Australia.

          This means two things, the periods of low renewable production are much shorter and the cost of overbuilding wind or solar (just as we overbuilt thermal in the past) is lower so it may be better to have 10-20% more wind and solar than we need and keep the existing gas and hydro plants to run 5-10% of the year as emergency backup than install vast quantities of storage.

          Finally premises side batteries or hot water are much better at lowering the peak load and therefore the investment on the distribution system than grid based storage such as pumped hydro. If solar + batteries + storage hot water + offpeak charging of electric vehicles become common place it is possible that even a zero carbon grid will not need much grid based storage at all
          50Hz which runs the North German HV grid says they can get to 70% renewables before they need storage. The figure is probably different here but whatever it is we are a long way from it today

          • Chris Baker 4 years ago

            Nice analysis Peter. The cost of storage in the form of batteries is much dearer than pumped hydro, and so in terms of overall cost to the community it would make sense to use grid storage. Trouble is behind the meter you can save say 25c/kwhr of energy stored compared to 5c/kwhr on the grid side, on average. The commercial case for pumped hydro is probably similar to that for peaking plant: you have to make your money in those short burst of ridiculous prices during the peaks. The commercial case for storage behind the meter is much easier to justify, and yet the total cost to the community is much higher.
            There’s something to be said for the days when utility services were provided as a benefit for the community, and costed that way, rather than for a profit making venture as we see today.

          • Peter F 4 years ago

            There are some technical/financial advantages of storage close to the load not necessarily behind the meter.
            1. They reduce both the capital costs and losses in the distribution grid. Grid batteries don’t do that.
            2. They respond much faster to load changes so reducing the need for spinning reserves
            3. They can be widely distributed therefore increasing system reliability
            4. many customers can buy them with their own money rather than wait for the government or the utility to provide them so implementation can be much faster than say pumped hydro.

            At the moment it seems that these factors outweigh the advantages of lower cost of pumped hydro

          • Chris Baker 4 years ago

            Your points are interesting, and invite some comments…
            1. Sometimes I suppose this is true. We keep hearing about our gold-plated grid, meaning that it has plenty of capacity. So I expect that in many places we can already add grid storage without extra capital cost of the grid. I get the losses thing.
            2. I don’t understand this. The response time differences you are talking about must be just measured in seconds, so how does this impact on spinning reserve? Especially when grid storage is like spinning reserve?
            3. Yes indeed.
            4. But this still increases total cost to community. I can see it fulfills the need for instant gratification 🙂

          • Peter F 4 years ago

            Sorry I meant batteries respond much faster than pumped hydro. That is true wherever they are located. Pumped hydro varies from 2-20 minutes batteries are less than a cycle. Spinning reserves cover both load steps and production trips of large generators. A large battery or super capacitor system that only stores power for 10 minutes mean that gas turbines or hydro can be turned off completely and then ramped up if necessary rather than just kept running in standby mode just in case.

            Re batteries. Economies of scale suggest big battery systems should be placed in big grid switchyards, but poles and wire efficiency suggest you would be much better putting most of the batteries near the load. This reduces I2R losses through the transmission system at peaks and iron losses in transformers etc all the time while increasing the average utilisation of the investment, thereby lowering the cost

            As we don’t need serious investment in storage for at least 5 years, I would wait and see how fast public adoption of behind the meter batteries go, what progress we make on energy efficiency, how far battery prices fall, how we can better optimise existing hydro and what all the benefits are of distributed storage before we need to incentivise large scale pumped storage

      • David Hall 4 years ago

        Peter, I great assessment! I totally agree with you.

    • Chris Fraser 4 years ago

      We can find 1500 MW of efficiencies each year and not replace dirty generators.

      • Peter F 4 years ago

        Absolutely right. If we were as energy efficient as California let alone Germany or Italy we would have peak demand around 22-24 GW and annual demand of 120TW.hrs vs currently 35GW and 190TW.hrs

  2. David Rossiter 4 years ago

    As electricity is a market surely an orderly closure of power plants is NOT a prerequisite for closure the market will determine how it will occur.

    • David Hall 4 years ago

      David, I totally agree with you. The market will decide.

    • nakedChimp 4 years ago

      Are we talking free markets or oligopoly/monopoly markets here?

    • Rikaishi Rikashi 4 years ago

      The electricity market is broken due to unpriced externalities and poorly regulated monopolies.

  3. SM 4 years ago

    A market designed to price electricity by the half hour isn’t necessarily up to the task of initiating permanent closure. Have falling coal prices caused mass mine closures and rehabilitation or just decision deferral and lots of holes in care and maintenance ?

  4. Brunel 4 years ago

    AUS should build an UHVDC line from WA to NSW so that the worst coal power stations can be closed and solar panels in WA can power NSW after the sun sets in SYD.

    While solar panels in NSW can power WA before the sun rises over WA.

    • Alistair Spong 4 years ago

      And then all sorts of other options become viable – geothermal in the cooper basin , wave power off the Great Aus.bite, 1000s of km of wind (onshore and offshore) , solar thermal, it’s endless really …. it could be shortened by connecting kalgoolie with Broken hill — ahh to dream , love to see a cost analysis

      • Brunel 4 years ago

        No need for a cost analysis.

        The 12 submarines will cost a fortune.

        6 subs will do.

        And the UHVDC can be used for the next 100 years.

        • Alistair Spong 4 years ago

          Yep , so we save 6 subs worth of money – but is battery storage better than 2000km of hvdc cost wise

          • Brunel 4 years ago

            Well the batteries will need to be recharged using local solar panels or using the UHVDC link on cloudy days.

            And having an UHVDC link will mean a more reliable supply – when it is raining on Sydney, it might be sunny in WA or SA.

            You can search on the internet for UHVDC costs.

    • David Hall 4 years ago

      I agree with your sentiment but at a cost ofc.$2 million per km for a 2,000MVA bi-pole transmission line the initial CAPEX will be in the billions. It would seem to me that the whole concept of integrating RE in to a fully functioning system across Aus needs a single authority with the mandate to direct this development and operation.

      • Brunel 4 years ago

        How many kV.

      • Barri Mundee 4 years ago

        Distance Adelaide to Perth = about 2700km so cost about $5.4 Billion.
        Could be another nation-building project like the NBN?

  5. DogzOwn 4 years ago

    Hazelwood is 1600MW but 8sets 200MW each. Why not hibernate half to them? Why not increase brown coal cost/royalty again, so it’s not so unlevel play ground cheap, so it doesn’t “enjoy” big market share at our expense?

    • Analitik 4 years ago

      Actually, they should (attempt to) shut down Hazelwood one unit at a time. When South Australia start screaming because they can’t get the Heywood interconnector flows needed during a day with calm periods, then the ability to shut down Hazelwood, without replacement, can be sensibly discussed

  6. Pedro 4 years ago

    Great idea, target the low hanging CO2 fruit first. This is the quickest and easiest way to reduce Australian emissions by about 2.8%. And almost 10% CO2 pollution reductions if we have an orderly shut down of Victoria’s dirty brown coal generators. Most are due for retirement anyway.

  7. DogzOwn 4 years ago

    Surely Peak, almost 100% above normal, needs to be reduced, by whatever means? ESC(Essential Services Commission) command 99.9% reliability even during Peak, which means huge investment to handle so few days of so few years. So why not 100% penalty tariff for users who run aircon at 16degC thermostat during heat wave? Japan has standard for commercial buildings of 26degC thermostat setting. When will we be able to afford standards and regulation?

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