Australia can get rid of most of its coal power plants, according to new analysis – but it can’t go 100% renewable just yet

Australia can turn its back on coal and achieve net-zero carbon emissions by 2040, according to new modelling. (David Gray, Getty Images)
  • New modelling by the Grattan Institute shows renewables could satisfy most of the country’s energy needs, with minimal to no need for coal.
  • The think tank says 70% of energy could be supplied by renewables and two in three coal-fired plants could be closed.
  • In another scenario, 90% could be produced by renewables with the remainder covered by gas, enabling Australia to achieve zero-net carbon emissions with minimal cost.
  • Visit Business Insider Australia’s homepage for more stories.

The Grattan Institute has waded into Australia’s energy debate, laying out its best path to achieving net-zero emissions.

The public policy think tank has proposed that Australia can make the clean energy transition “without threatening affordability or reliability of supply” in a new report that also provides a few major caveats.

“It’s a myth that Australia needs to continue to rely on coal-fired power stations to keep electricity bills down,” energy and climate change program director Tony Wood and analyst James Ha said.

“But we should not rush to 100% renewable energy, because ensuring reliability would be costly – especially in the depths of winter in the southern states when electricity demand is high, solar supply is low, and persistent wind droughts are possible.”

Instead, Grattan proposes a balance of the two. Its modelling suggests Australia could move to 70% renewable energy and close two in three coal plants without threatening the reliability of the power grid or risking price surges.

In a more ambitious bid to achieve a net-zero carbon goal, Wood and Ha proposes that it “could also be reliable” for Australia to use renewable energy to supply 90% of Australia’s energy without a single coal plant.

They admit this second option would generate extra costs but would enable Australia to slash emissions more drastically.

“This would be a low-cost way to nearly eliminate emissions in the [National Energy Market], and offsetting any remaining emissions each year could well be the cheapest way to reach net zero,” Wood and Ha said.

With this in mind, their report relegates the idea of 100% renewable energy to a pipe dream at present, pending future technological leaps.

The Institute says the remainder of Australia’s energy can come from gas, conceding it remains “the lowest-cost ‘bridging’ technology until a zero-emissions alternative, such as hydrogen-fired generation, pumped hydro storage, or carbon capture and storage, becomes an economically competitive backstop.”

Grattan’s modelling also undermines arguments made by the Coalition that all coal power will need to be replaced by gas. Under its second scenario, natural gas would only be required to satisfy a fraction of Australia’s power needs, explicitly dispelling the idea of the Morrison government’s ‘gas-led recovery’.

The think tank is not the first to do so. On Monday, ABC’s Four Corners program revealed that key energy agencies have also butted heads with the Energy Minister Angus Taylor.

The Australian Energy Market Operator (AEMO) which oversees the gas and electricity market reportedly felt the ire of Taylor when it tried to publish a report that contradicted the government’s line on gas. His departmental secretary allegedly also urged the head of the Energy Security Board (ESB) to resign when they wouldn’t support the policy.

Grattan meanwhile jettisoned proposals by others to extend Australia’s reliance on coal, saying the fossil fuel will eventually be unnecessary.

“Most of Australia’s coal-fired power stations are scheduled to be retired by 2040. Governments should not to use taxpayers’ money to extend the life of existing coal-fired generators, or to subsidise the entry of new coal-fired generators,” Wood and Ha said.

“Australia can achieve the trifecta of reliable, affordable, low-emissions electricity, and we can do it without coal.”