Australian coal power in free-fall, but they making off like bandits | RenewEconomy

Australian coal power in free-fall, but they making off like bandits

With current market prices 2–4 times the costs of generation, our remaining coal fired power stations are making out like bandits.




A total of 12 Australian coal fired power stations have been shut down in the last five years. At least two more will be retired in the next five years, very likely to be joined by seven more around the end of 2020s.

In September Synergy will shut half of Muja AB, with the remaining two units scheduled for retirement in April 2018. (The Barnett state government controversially spent $310m refurbishing the station between 2009 and 2015.)

This will bring the total number of Australian coal fired power stations retired since 2012 to 13.

refurbishing power stations list

You can get the data with this Datawrapper link.

Counting Muja AB, that’s a withdrawal of 6.5 GW of capacity in a little over five years.

With current market prices 2–4 times the costs of generation, our remaining coal fired power stations are making out like bandits. Owners of the older ones have plenty of incentive to stretch out the lives a little longer, but with the renewables generation that is already contracted, both market prices and baseload requirements will fall — pushing out coal.

AGL has notified the market operator that it will close the 2000 MW Liddell power station in March 2022.

A large chunk of the fleet comes up for retirement around the end of the 2020s.

Origin Energy has announced that it will shut the 2,880 MW Eraring power station, Australia’s largest, ‘by the early 2030s’. AGL’s 2,180 MW Loy Yang A and 2,640MW Bayswater stations are a couple of years younger — AGL has announced that it won’t to run the stations past the end of their operating lives.

With Vales Point (1,320 MW) turning 39 and Yallourn (1,480 MW) and Gladstone(1,680 MW) both blowing out 41 candles this year, and Muja CD (854 MW) in the grade below, we can expect to see 15.1 GW of coal close from the late 2020s to the mid 2030s — possibly sooner.

No-one has built a coal fired power station since the end of last decade:

  • Kogan Creek in Queensland was built in 2007 — the Minerals Council classifies the $1.2bn power station’s 945 kg CO2/MWh as ‘Low Emissions’. Yes, seriously.
  • Bluewaters in WA was built in 2009 — less than two years into operation the $800m power station’s ultimate owner, Griffin Coal, went into administration.

With tumbling costs of alternatives, namely renewables, it’s highly likely these were the last coal fired power stations to be built in Australia. Leonard Quong of Bloomberg New Energy Finance puts it best:

Even if the government were to completely de-risk coal by paying for the whole plant and guaranteeing an exemption from any future liabilities, the lowest LCOE that could be achieved is AUD 94/MWh, which is still well above wind, solar or gas.

Which means shortly around 2030, give or take a few years, our coal fired power station fleet will be no more than 11 power stations, with a combined maximum capacity of just 9.6 GW — less than one-third of what was operating only five years ago.

In the meantime, according to the Australian Energy Market Operator’s projections we’ll connect 22 GW of new large scale wind and solar over the next 20 years and that by then we’ll have more than 20 GW of rooftop PV.

Every single panel and turbine installed reduces the need for baseload.

AEMO’s network development plan illustrates the decline of coal very clearly.

As is the case around the world, the Australian coal fired power sector is in free-fall.
coal fired power station list

You can get the data with this Datawrapper link.


  • The emissions intensities are kg CO2-e/MWh sent-out, i.e. after accounting for auxiliary load (energy consumed on site).
  • Unless otherwise specified, emissions intensity values are sourced from the ACIL Allen report (referenced below).
  • Swanbank B and Callide A are not listed in ACIL Allen report, so emissions factors are sourced from AEMO CDEII dataset.
  • Muja AB and Kwinana were not listed in the 2016 ACIL Allen report and, as members of the SWIS, are not listed in the AEMO CDEII dataset.


Source: Quora. Reproduced with permission.

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  1. Ken Dyer 3 years ago

    This article appears to directly contradict the Finkel report which says “predicts generation will decline over the next 30 years”, i.e up to 2050.

    The article paints a very different picture that indicates that only a rump (6.4GW) left, 6 power stations by 2030 – a much more positive outcome when one considers that most of them are in private hands. These private hands are moving rapidly towards renewables, and that these coal power stations are nearing if they haven’t already reached end of life.

    The nasty sting in the tail of the Finkel report is the proposed requirement that coal fired power stations must give 3 years closure notice. This directly impacts the ability of coal generators to respond to economic market conditions and mitigates against early closure.

    This requirement was apparently driven by the rapid close of Hazelwood, although everybody knew it should have been closed years before. The rapidity of its closure served to highlight the failure of government to not only plan for transition to new forms of energy, but to also leave its constituents swinging in the breeze without a safety net.

    • Geoff James 3 years ago

      No doubt it’s complicated in detail, but you’re right Ken, the writing has been on the wall for years, so why was there no plan for the Hazelwood workers? Gross lack of leadership and abdication of responsibility. As a direct result, jobs being a serious issue intrinsically and politically, we get the 3-year rule.

    • George Darroch 3 years ago

      The other way to view it is that it gives renewable generation three years to be built and respond to demand, rather than have that hole filled by spinning turbines.

    • Mike Westerman 3 years ago

      I’m not so sure on the 3y rule. If I’m a generator with coal and I know there’s a fair chance in the next 3y I’ll be too expensive for the market, I’ll give my notice in as soon as I can. Who’s going to cane me if at the end of 3y I ask for an extension of a year, if prices are still holding up? I think the rule will mean every coal station will give notice of closure well before 2030, except perhaps Kogan Creek, altho’ it will go as well if it no longer has cheap insurance to cover its trading positions coming from Wivenhoe PHES.

    • David Mitchell 3 years ago

      I’m with Mike on the giving notice issue, with one small wrinkle. If CET legislation won’t be effective until (say) 2020 and there is a requirement that coal generators give three years notice, then I think we will have a few that jump the gun and pull the pin before the legislation comes into effect. Because, if the notice requirement is to really provide continued generation certainty, then one could conceive that a generator might be required to continue to operate AT A LOSS for up to three years. Would you open yourself up to such a risk? Better to pull the pin prior to regulation.

      This might be exacerbated by the renewables plus storage requirement of the CET. If you have a project, much better to get it built before CET legislation without the requirement for firming. Which suggests we might have a little bubble of unfirmed generation into the market cutting coal’s lunch prior to 2020.

      The more I think about this Finkel report, the better I like it.

      • solarguy 3 years ago

        What your saying makes sense!

    • solarguy 3 years ago

      I’m in two minds about 3yrs notice of closing. 1.5yrs wouldn’t be enough to organize RE replacements, Finkel, is at least correct about the need for an orderly, properly timed transition. Perhaps 2yrs is enough, but maybe if they are told when to go within that time frame.

  2. John Saint-Smith 3 years ago

    Many power stations like Tarong continue to operate, but on 50% load due to decreased demand. These ‘partial shut-downs’ should be included in the analysis.

  3. Les Johnston 3 years ago

    The closure of these coal burning plants will bring cleaner air to many rural and residential areas around these sites. With cleaner air, people will live longer. The future will be brighter and healthier. Emission limits for stacks from these plants should be reduced to best practice. Giving lenient emission standards (in the hands of State Governments) is not good for people nor the environment – particularly a response to climate change.

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