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.”