Australian leaders face pressure to wind down the nation’s coal-powered generators in the lead-up to COP26 next month, as the energy sector moves to accelerate the nation’s transition to clean energy and wean itself off coal.
New data released by the Australian Energy Market Operator on Friday revealed new renewable energy records in national power generation. Renewable energy powered 61.4% of the nation’s grid between 1–1.30pm on September 24, and 31.7% of all Australian electricity between July 1 and September 30.
The trend has been driven by surging investments in large scale wind and solar farms across the country, according to the AEMO, along with the proliferation of rooftop solar initiatives being rolled out across the states, resulting in wholesale prices so low that coal and gas just can’t compete.
In recent months, colossal spending efforts have seen the likes of Providence Asset Group and other backers roll out some 29 solar farms in NSW, and countless others in Victoria, where it announced a trial of a new hydrogen-lithium battery that it aims retrofit across its 10 owned and operated solar farms.
According to the AEMO, the records broken through the September quarter can also be attributed to a seasonally windy period, a broader distribution of rooftop solar, and higher average rainfall spurring an increased output of hydro-power from Tasmania.
“The increase in renewable energy supply, combined with a mild August and COVID-19 restrictions reducing demand, led to wholesale electricity prices being negative or zero for 16% of trading intervals, more than double the previous record of 7% in the fourth quarter of 2020,” the AEMO said in the report.
The low wholesale prices seen across Australia’s clean energy market have also put new pressure on the coal plants that have for so long generated a majority of the nation’s electricity, which in many cases are now running at a loss.
And energy providers are responding in kind. In March this year, Energy Australia announced plans to close down Victoria’s largest coal-powered plant in Yallourn in 2028, four years before its license expires in 2032.
Energy Australia managing director Catherine Tanna said at the time that, although the move was in its infancy, it did come as a direct result of the world’s ongoing transition to renewable energy.
Energy Australia isn’t alone, either. AGL, the nation’s largest energy company, announced in July that it would separate its coal fleet from the company’s retail energy business after the company recorded a $2.3 billion half-year loss, causing shares to fall more than 11% over 48 hours amid coal market doubts.
The move prompted condemnation from critics and ministers alike, who in some cases warned that Australia was moving too swiftly in the direction of renewables, and that doing so could expose Australians to power shortages and blackouts.
As a result, the Morrison government has moved to invest in new gas projects, described as “transition” fuel in the move away from coal, until it is convinced that renewable energy itself can handle Australian demand.
Analysis by University of Queensland economist John Quiggin for the Australia Institute found that transitioning away from coal, despite the promise shown by renewables and their capacity, could take longer than some might think.
He thinks that Australia could more realistically follow in the footsteps of countries like Canada, where coal is expected to be phased out completely by 2030.
As far as federal policy goes, Federal Energy and Emissions Reduction Minister Angus Taylor has in recent months sat at the helm of a policy pitch for a new capacity mechanism to drive private investment into dispatchable assets.
Dubbed “CoalKeeper” by its critics, the policy would essentially act as a national energy reserve — and, in theory, keep coal and gas reserves on the grid — for times when sun and wind are unviable.
The UN’s latest Intergovernmental Panel on Climate Change report all but sounded a final warning on the world’s widespread dependence on coal as a leading contributor to manmade climate change.
The report suggested that there is nothing that can be done to stop the rapid warming of planet Earth over the next 30 years, as fossil fuel emissions and feeble reduction targets have all but thrust a global society into the arms of climate catastrophe.
Prefacing the report, UN secretary-general Antonio Guterres said the report’s findings “must sound a death knell for coal and fossil fuels, before they destroy our planet”.
Prime Minister Scott Morrison is set to attend the UN’s COP26 climate summit early next month, where his commitment to net zero emissions by 2050 is beholden to an agreement yet to be made with federal Nationals MPs, whose opposition to net zero centres around concerns over the wind-down of coal-powered plants and the effect it would have on rural and regional communities.
Recent reports indicate that Nationals MPs gave leader and Deputy Prime Minister, Barnaby Joyce authority to broker a deal with Morrison over cutting carbon emissions to net zero by 2050 ahead of the summit.
Joyce is expected to meet with Nationals MPs on Sunday afternoon to decide what kind of commitment Morrison will be able to take to Glasgow.