04/08/2021

(AU The Age) ‘We Need More Urgency’: Top Renewable Group Warns Against Paying To Keep Coal Alive

The Age - Nick Toscano

The head of the nation’s top renewable energy group has urged legislators to reject a proposal to pay coal and gas-fired power stations to keep operating in order to avoid the shock of sudden closures.

Powering Australian Renewables (PowAR) – a consortium of power giant AGL, the Future Fund and the Queensland Investment Corporation – is the latest clean-energy developer to speak out against a contentious recommendation by the nation’s Energy Security Board that could see fossil fuel generators paid to guarantee future capacity.

A consortium of power giant AGL, the Future Fund and the Queensland Investment Corporation this week takes control of Tilt Renewables’ Australian wind and solar farms. Credit: Joe Armao

Chief executive Geoff Dutaillis warned the move would deter the very investment needed for a smooth transition to a zero-emissions grid.

He told The Age and The Sydney Morning Herald there were better ways to redesign the market and support renewables during periods when weather conditions were unfavourable.

“The sun doesn’t always shine, the wind doesn’t always blow; there will be renewable droughts,” Mr Dutaillis said.

“If we get a diverse pool of resources and an interconnected system linking Queensland, NSW, Victoria, and South Australia properly – and, dare I say, even Tasmania – we will have a diverse, resilient system which allows us to use resources from different parts of the country cost-effectively.”

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Last week, the Energy Security Board sent its final recommendations for a redesign of the energy market to the national Cabinet.

The recommendations include a “capacity mechanism” to pay power generators to guarantee they can dispatch power when required. State and federal ministers are expected to decide on the rule changes within months.

PowAR on Tuesday will become Australia’s largest operator of renewable energy when it assumes control of Tilt Renewables’ wind and solar operations across the country following a $2.7 billion takeover deal earlier this year.

Mr Dutaillis said the consortium was eager to realise the full potential of Tilt’s outstanding development pipeline of energy projects, including more than 3500 megawatts of wind, solar, battery storage and peaking capacity.

However, he expressed dismay at the state of energy politics in Australia and said he believed the Morrison government was overly focused on prolonging the lives of ageing coal generators and expanding the use of gas power to support the shift to renewables.

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“Scientific assessment and lived experience are telling us every day that we need to act with more urgency, yet we are still in the midst of a debate in Australia where we are talking about subsidising increasingly ageing and unreliable generation beyond their useful life,” he said.

“We need a significant amount of flexibility and dispatchable generation, but that can happen in a renewable world – we’ve got battery technology evolving quickly, we’ve got pumped hydro being talked about every day.”

Mr Dutaillis also called for a greater focus on delivering improvements to the nation’s outdated, coal-based grid, where poor transmission infrastructure is hindering the delivery of clean power around the grid and across state lines.

Although coal still accounts for the majority of the country’s energy supply, an influx of renewable energy into the country’s main power grid in recent years has placed enormous pressure on coal generators by driving down daytime electricity prices to levels where they are unable to compete, threatening early closures.

EnergyAustralia’s Yallourn brown coal plant in Victoria this year announced it would shut down in 2028, four years earlier than planned, and there are expectations across the industry of other plants’ closure dates being brought forward.

Because electricity production is a dominant source of Australia’s emissions, reducing output from coal plants would help sharply reduce the national carbon footprint.

However, the Morrison government and some energy industry leaders are ramping up warnings that unexpectedly early shutdowns of coal-fired generators could raise the danger of blackouts or power bill spikes in the future.

Power plant owners including EnergyAustralia have expressed support for a proposal that would ensure there was always adequate capacity to meet consumer demand and keep the lights on.

“Our market is not providing the right investment signals for the flexible dispatchable capacity the system needs as ageing thermal baseload generation retires and Australia transitions to a low-emissions future,” EnergyAustralia head of markets Ross Edwards said.

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