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Are we going to renew Australia’s coal-fired electricity generators? It doesn’t seem likely. Here’s why.

 

Australians want three things from their electricity system: costs they can afford, supply they can rely on, and environmental sustainability. It’s easy to trade off one of these goals against the others, and tough to maximise them all. Right now, wholesale electricity prices are soaring and the reliability and security of supply are under increasing strain in South Australia and soon Victoria.

 

Price changes have been largely driven by the exit of older coal-fired generators and the surging price of fuel for gas-fired generators. The exit of coal and the rise of gas are both accelerated by the increasing role of renewable energy. But our electricity system isn’t yet set up to integrate very high levels of variable renewables. It will take a lot of reform to moderate costs and encourage sufficient flexibility in generation, networks, storage and demand.

 

 

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Many people will naturally ask: if our old coal-fired generators delivered affordable, reliable energy, why not stick with coal? Surely replacing old coal plants as they retire with new ones will be simpler and more effective than moving to a radically different energy system? And surely new coal will be much cleaner and more efficient than old plants?

 

As it turns out, new-for-old replacement of our coal fleet does not look like a good solution for price, reliability or the environment. Electricity sector investors are unlikely to finance a new coal-fired power station in Australia again – and if they do, it will probably look very different to anything built before. The reasons are only partly to do with climate change. Competing technologies and the changing electricity market are even bigger factors.

Source: The Guardian