As more businesses make the transition to solar and renewable energy Power Purchase Agreements, Australian Energy Market Operator Chief Audrey Zibelman said that if Australia eliminates coal generation in an orderly manner, the country can keep the lights on.
Speaking on ABC news, after the Australian Financial Review’s Energy Summit last week, Ms Zibelman contradicted the government’s line that if coal generation is removed from the national energy mix, the electricity grid would collapse.
Ms Zibelman said that Australia’s coal generation assets should be kept in the mix, for as long as they are economically viable.
The Integrated System Plan points out that Australia’s coal generation assets are all set to be retired by the year 2050, and that they should be replaced buy the lowest cost generation assets.
As things stand, that would be solar energy. An Origin Energy executive recently confirmed that at present, solar energy generation costs around $4.50 per MWh. Coal, on the other hand, costs $5 per MWh while wind is in the region of $5.2 per MWh.
Last Australian existing coal plant will retire in 2048
The last of Australia’s coal-fired plants – AGL’ s Loy Yang A – is due to be retired in 2048. This also ties in with a report by the United Nations Climate Panel, which states that in order to avoid catastrophic global warming, coal needs to be taken out of the generation mix by 2050 globally.
Energy generation companies have stated that new investment in coal-fired plants is simply not economically viable.
All of them are transitioning away from coal and their targets are to change their generation sources to renewables and storage, with pumped hydro being the weapon of choice.
AEMO’s Integrated System Plan states that Australia should maintain coal assets for as long as they are economically viable and that a plan should be in place to replace them with resources that are lowest cost.”
The issue which still presents itself is ensuring there is enough dispatchable power when the grid is stressed by critical events such as heatwaves.
Ms Zibelman states that the most likely resources which will offset such threats to the grid include battery storage, pumped hydro, demand management and fast-start generators.
That fits in nicely with the IPCC proposed timetable. As Zibelman says: “We need a plan and (we need to) be able to execute on that plan.”
Fundamental changes occurring in the energy sector
- Grid demand is flattening due to the growth of rooftop photovoltaic (PV) and increasing use of local storage, as well as overall increases in energy efficiency. This is true even with the anticipated electrification of the transport sector over the period.
- Over the next 20 years, a percentage of the NEM’s existing coal resources will be approaching the end of their technical lives, and will likely be retired, which highlights the importance of mitigating premature retirements as these resources currently provide essential low-cost energy and system support services required for the safe and secure operation of the power system.
- The investment profile and capabilities of various supply resources have changed and are projected to continue to change radically.
- In particular, costs of new renewable plant continue to fall, and advances and availability of storage technologies, particularly pumped hydro, flexible gas-powered generation and distributed energy resources (DER) are emerging as core components to a low cost and reliable energy future.
The electricity market is still centralised, but it is becoming increasingly obvious that the future will be dominated by renewable energy sources. It is also becoming increasingly clear that businesses need to position themselves for growth by generating their own behind the meter energy.
Rooftop solar is a great way to do this, but you can also secure Power Purchase Agreements that give you the knowledge of where your energy is coming from and how much you are going to be paying for it.