22/02/2022

(AU SMH) There’s Real Power In Change – And Jobs Too

Sydney Morning Herald - Andrew Stock

Author
Andrew Stock is a Climate Council Expert. He is a former Origin Energy executive, with more than 40 years’ experience in senior energy executive roles.
Origin Energy’s decision to bring forward the closure of its Eraring coal-fired power station – NSW’s largest – reflects the reality of a 21st-century power grid, and 21st-century economics.

Coal is king no longer. Unable to compete on cost with renewable energy, it is also inflexible, ageing, inefficient and polluting.

Eraring power station, which owner Origin Energy has said will close seven years early in 2025. Credit: Dean Sewel
In Australia, and globally, renewables backed by storage deliver the cheapest power, and do so without the greenhouse emissions coal and gas produce, which is critical if we are to avoid the worsening impacts of climate change.

As a senior executive for over 10 years at Origin, I was responsible for the development of its power generation fleet, gas, wind and solar. In the early 2000s, before global emissions ballooned on the back of coal and gas expansions, gas power was seen as a transition pathway to renewables.

Even then, though, I thought Origin’s foray into coal power was a step too far in the face of climate change science, and stayed well clear of it.

After a decade of coal ownership, it looks like the current board and CEO have finally seen the light.

Energy Coal plant closure explainer
Origin’s announcement should not have come as a surprise to the Morrison government. As recently as this month, other energy majors like AGL and Alinta, have made announcements or comments about bringing forward their coal power station closures.

The market operator, AEMO, foreshadowed earlier coal closures at the end of 2021 in its draft Integrated System Plan.

By giving three to four years’ notice, Origin is ensuring the market has the time needed to build out more renewables and storage to replace Eraring’s capacity and energy. Although, last year, the Eraring station ran at only 50 per cent capacity factor.

Big batteries can be delivered in less than a year, large solar and wind farms in less than two, and there is no shortage of players willing to invest the capital to deliver these projects.

Origin itself has said it will add a 700 megawatt battery at the Eraring site and could double capacity of its pumped hydro station at Shoalhaven.

AGL is doing the same, adding renewables and storage to cover the progressive closure of its Torrens A gas power station in South Australia, and its Liddell coal power station in NSW.

Energy production in 2021
*South West Interconnected System only Source: OpenNEM. This data covers the period from 1 January 2021 to 31 December 2021.

The same week as Origin’s announcement, the NSW government unveiled a comprehensive plan to prepare the state’s electricity grid for inevitable coal closures.

This includes the new Hunter-Central Coast Renewable Energy Zone (REZ), which aims to provide 100 terawatt hours of power by the mid 2020s. That is almost double the generation of NSW’s entire coal fleet.

The new Hunter REZ is just one of four proposed renewable energy zones in the state.

Provided that extra new renewable capacity and storage is in place and operating before coal closures, there is every reason to believe the transition away from coal in NSW will deliver cheaper power to consumers.

That is what happened in my home state of South Australia.

The state now routinely has the cheapest wholesale power prices in the National Electricity Market, and the cleanest grid of any mainland state. Meanwhile, gas in SA is in steep decline, as it is across much of the national electricity system.

Origin has made a commercial decision and says it is positioning for a global clean energy future. However, it has a long way to go after Eraring closes, as it still seeks to expand its gas fracking in places like the NT’s Beetaloo Basin, Canning in Western Australia and its coal gas in Queensland.

Energy
All of these projects are hugely emissions intensive.

Hopefully Origin will soon realise the folly of continuing to sink shareholder funds into these carbon-intensive gas developments, ones that the traditionally conservative International Energy Agency says have no place in the world’s energy future.

Australia has the natural resources to become a world leader in renewable energy, as well as industries such as clean manufacturing, minerals processing and renewable hydrogen.

Generations of Australians could work in these clean industries.

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