The end of coal-fired power can be managed or messy

Coal-fired power station
26 February 2020

Coal is on the way out. The head of the world's largest coal export port says it needs to prepare for the day it will no longer be viable to send coal from Newcastle to the rest of the world. And there is no doubt coal will disappear from Australia’s energy system, too. The question is just how quickly, and how messy this process will be. It is in the hand of governments to make the transition palatable.

Net zero emissions for any country relies on a near carbon-free electricity system that can also supply clean energy in transport and industry. In Australia, that means replacing coal power with renewables and storage.

In fact, in Australia the shift away from coal does not rely on climate policy. It is happening already driven by the market. Eleven of Australia’s power stations have closed since 2012, some at very short notice. The average age at closure was around 40 years. Half of the remaining 16 power stations are over 35 years old. The writing is on the wall.

The new investment is invariably in wind and solar plants, with a smattering of battery storage and gas turbines. That is because wind farms and solar parks supply energy at far lower cost than a new coal power plant could or any gas plant can, let alone nuclear. That cost advantage is so great that it can easily pay for energy storage when it becomes necessary as much more renewable power is added to the grid. Right now, extra transmission lines are needed. The cost will be borne by electricity users, but even so electricity costs are likely to fall.

The pressure on coal plants is only going to increase. Higher supply of renewables means lower prices in the market, and greater need to ramp coal plants up and down, putting extra stress on the machinery. Plants will exit, quite possibly faster than expected.

Read the full opinion piece in The Sydney Morning Herald, co-authored by Prof Frank Jotzo and Prof John Wiseman