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Three reasons why coal power won’t make a comeback in Australia

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While the vast majority of Australia’s energy industry gets on with the shift to renewables, the federal government continues to tie itself in knots over the future of coal-fired power.

Beholden to a powerful fossil fuel lobby, and hamstrung by a number of die-hard coal fans within its own party ranks, the Turnbull government refuses to let go of the notion that the nation’s ageing coal fleet should somehow be preserved.

It even believes  that new “clean” coal plants might be built to support the northern reaches of the National Electricity Market.

But this is not the reality. And you don’t have to take our word for it.

Rather, take it from Chloe Munro – an energy market expert whose extensive industry experience ranges from helping to “lovingly craft” the NEM more than 20 years ago, to chair of the Clean Energy Regulator, to recently advising the Finkel Energy Review, to independent chair of AEMO’s expert panel.

Speaking in a panel discussion on how to achieve 50 per cent renewables without comprising grid stability, Munro told the ABB Customer World conference in Melbourne on Thursday that by about 2030-35, half of Australia’s remaining coal power fleet would be gone. And wouldn’t be coming back.

“In my view,” she said, “It’s not likely much of it will be replaced with (new) coal. And there are three reasons for this…”

1. Coal power is expensive

“First is simply cost: A new coal-fired power station is an expensive thing to build; renewables are still coming down that learning curve … so we will see the continuing shift to renewables on the supply side,” Munro said.

2. It’s not flexible enough

“There’s certainly a role for gas in the transition (to renewables) … being able to ramp up and down quickly. But there really isn’t the demand for baseload power that just chugs along and is really only efficient if it is operating at near full capacity, consistently, 24/7. The demand for that is just (not there).

“So that’s the second reason. it’s not flexible enough,” Munro said.

3. Because it’s emissions intensive

The third reason why new coal power won’t be built on Australia’s future NEM, said Munro, is because it’s a major source of the sort of greenhouse gas emissions that we should be eradicating from our electricity sector if we are to have any hope of meeting our Paris climate targets, pledged to by the Turnbull government.

“We really need to get serious about emissions reduction and that means that there’s going to be less coal in our whole fleet going forward,” she said.  

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  • Peter F

    And from a financial point of view she could have added incredibly risky.
    1. Now that China is building a Carbon Tax system, what is the risk that sometime in the next 20 years i.e. a quarter of the way into the life of the new plant it decides to impose a border carbon tax
    2, By the time the plant is built, midday wind and solar push thermal/hydro demand down to 5-6 GW across the NEM. In SA wind is already meeting demand for some hours on some days and the equivalent of all the gas generation is being exported. This trend will extend to the whole Victoria, SA, Tasmania triangle before the coal plant can generate a watt so where is it going to get its break-even 65%CF
    3. Someone decides to charge full price for water and/or impose maximum outfall temperatures
    4. A rational government comes to power in Australia and imposes a carbon tax or EIS or even just a $10/tonne health levy on coal.
    5. Batteries, flywheels and pumped hydro get even cheaper

    • Joe

      Yes, point 4. needs urgent doing with the change of Government at next election.

  • Jonathan Prendergast

    Reason 4 – It takes too long. Probably 5-8 years for planning, financing, design, construction & commissioning. it is hard to know energy prices in 3 years time. How can you invest if you have no revenue for 8 years, and have no idea what that revenue will be.

    • Joe

      It still doesn’t stop The COAL Fanboys like Christensen, Canavan and Stephen Galilee, CEO NSW Minerals Council from continually banging the drum for HELE’s to be built.

      • Nick Kemp

        Even if those fools love coal the banks don’t so unless they put their own money into it it won’t happen

        • solarguy

          The strategy of the coal lobby Nick, is to convince the tax payer to put our money into it and the LNP are all happy with that scenario.

          • Paul Surguy

            There needs to been one coal fired power station in NSW,QLD,VIC turned into a museum,
            so the kids born today can see what stuffed the planet

  • Mike Westerman

    Reason 5 You can’t run cars and trucks on coal, and energy security demands an indigenous energy source. So if you are electrifying transport, use it to improve the supply/demand balance.

  • Hettie

    Reason 6
    Paris targets are all very well, but not nearly as compelling as keeping planet earth habitable.
    The Paris targets won’t go anywhere near that.

    • Ken Fabian

      Unfortunately framing what Australia does as kowtowing to international agreements rather than about contributing at or above our weight to global climate stability, for the sake of enduring prosperity, looks deliberately diversionary. It directs discussion of the issues onto more disputable grounds, where competitive nationalism can be counted upon for reactive, unthinking voting rather than carefully considered votes based on assessing the benefits of co-operative internationalism.

      • Hettie

        Indeed. Too easy to lose sight of the fact that there is no planet B.

  • Barri Mundee

    Reason 7
    Risk of stranded assets.

    • Nick Kemp

      I’d go as far to say certainty of stranded assets

  • heinbloed

    OT

    The German “PV Magazin” has published a list of plug-and-play modules (so called guerilla PV), these PV-systems can be plugged directly into household sockets by anyone:

    https://www.pv-magazine.de/marktuebersichten/produktdatenbank-stecker-solar-geraete/

    machine translation:

    https://translate.google.com/translate?sl=de&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.pv-magazine.de%2Fmarktuebersichten%2Fproduktdatenbank-stecker-solar-geraete%2F&edit-text=

    (Note the currency 230W and frequency 50Hertz)

    The accompanying article:

    https://www.pv-magazine.de/2018/03/16/neue-marktuebersicht-zu-stecker-solar-geraeten/#comment-33956

    machine translation:

    https://translate.google.com/translate?sl=de&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.pv-magazine.de%2F2018%2F03%2F16%2Fneue-marktuebersicht-zu-stecker-solar-geraeten%2F%23comment-33956&edit-text=

    ————————————————————

    PV-Magazin is asking for help completing the list: if you know any plug-and-play manufacturers let them know.

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    • GregS

      Please don’t spam.

      Edit – reported you to Disqus for spamming

  • Jorome

    And health- not just the global effects of CO2e but also the local effects of all the other health destroying pollutants coming out of the stack

  • trackdaze

    2017 saw about 100Gw of solar installed worldwide

    Net coal was ~35Gw. The tide most certainly has turned.