Coal news and updates

As more solar and wind generation is connected to a gradually augmented National Electricity Market, some of the 16 coal power plants that supply power to the east coast will become financially unviable and at least one is likely to face closure several years sooner than planned, according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA) and Green Energy Markets.

 

Tracking the announcements of proposed wind and solar projects, authors Tristan Edis and Johanna Bowyer found previous estimates of future power supply from renewables in the NEM to be understated.

 

A huge amount of renewable energy supply is expected to be added to the NEM. From 2018 to 2025, new wind and solar plants will add 70,000GWh of extra supply, which is more than NSW’s entire electricity consumption. By 2025, it is forecast that the installed renewables capacity will include 8GW of utility-scale solar, 12GW of wind and 22GW of rooftop solar (a forecast which excludes additional supply expected from the NSW Government’s Infrastructure Roadmap).

 

“The market is facing a tidal wave of new supply, much greater than anything government authorities or market analysts forecast or even contemplated just two years ago,” Edis says.

 

“The supply added from 2018 to 2025 equates to over a third of the entire demand in the NEM, and more than eight times the annual generation of the Liddell coal-fired power station in NSW.”

 

Co-author Bowyer notes this extra supply will lead to a collapse in output from many of the existing fossil fuel generators.

 

“They will be displaced because wind and solar have no fuel cost and typically bid into the market with prices close to zero,” Bowyer says.

 

“We predict that gas power station output will fall by 78% and coal output by 28% by 2025 compared to 2018 levels.

 

“The extra competition from wind and solar plants will also have a deflationary impact on wholesale electricity prices, as more expensive gas and coal generators will be needed far less. While prices will be more volatile, on average they are likely to return back to the kinds of levels that prevailed in 2015. This is because the extra supply from renewables is several times greater than that lost from the closure of Hazelwood, Northern and Liddell Power Stations.”

 

The authors note the combination of renewable supply displacing output from coal and gas plants, as well as reducing prices, will lead to a huge reduction in revenue for these generators.

 

Source : https://www.ecogeneration.com