At the moment marks a powerful watershed for Australia’s power transition. The coal-fired furnaces on the Liddell Energy Station in New South Wales will likely be switched off, for good.
There are fairly just a few causes for Liddell’s closure. But it surely has been extremely controversial. The plant is greater than 50 years previous, and studies are that it has been operating at nicely wanting its 2 gigawatt (GW) of capability for some years from its 4 500 MW generators.
The event is undoubtedly factor for Australia’s carbon emissions and it’s the continuation of a pattern that won’t be reversed. Regardless of its age and the price to its proprietor AGL to keep up, Liddell can also be being more and more pushed out of the market by clear power – particularly photo voltaic and wind.
Aussie houses and companies are adopting rooftop photo voltaic and house batteries at record-setting charges, and utility scale photo voltaic and wind initiatives proceed to be constructed. Because of this the previous coal-fired clunkers which have powered the nation for many years have gotten financially uncompetitive as there are fewer and fewer alternatives for them to earn their hold. The result’s they get switched off and exit the Nationwide Power Market (NEM), and which means decrease emissions.
Because the analysts from BloombergNEF wrote of their Australian market outlook and power market evaluation from January, retiring coal mills means dramatically decreasing local weather emissions from Australia’s energy sector. Or, in analyst communicate: “The sheer magnitude of coal technology and its precipitous decline are indicators for the autumn in carbon depth in Australia in addition to the tempo of decarbonisation.” Certainly.
The chart under paints the image. Our carbon emissions are falling, however it’s in electrical energy technology the place the most important declines have been made – and the autumn of “king coal” is the first trigger.
Nevertheless, in the identical breath Bloomberg notes that the closure of the coal mills is “remodeling the power combine within the NEM”. And that is probably the place darkish clouds lurk behind the closure of Liddell’s silver lining.
Dispatchable technology
For those who take a better have a look at what Liddell being switched off means for Australian houses and companies, there are just a few worrying indicators. The exit of Liddell and different coal mills has been something however orderly.
The back-and-forth of power coverage beneath a sequence of federal Coalition governments has made it tough for AGL and others to make the plans they actually wanted to: mothball their previous coal energy crops sooner fairly than later. The previous CEO of AGL, Andrew Vesey misplaced his job over his plans to close down Liddell and substitute it with photo voltaic, wind, and batteries as a consequence of a political standoff with the Coalition authorities on the time. And let’s not overlook Malcolm Turnbull himself, who couldn’t carry his colleagues within the federal Liberal and Nationwide events into line behind an power coverage and located himself changed as PM by Scott Morrison.
The results of all this chaos is that there are critical issues that the NEM, and New South Wales particularly, gained’t have enough dispatchable energy notably in moments of sunshine wind and darker days. Whereas photo voltaic and wind has surged to interchange the fading coal mills, these sources are variable and can’t be cranked up exactly when and the place they’re wanted.
David Dixon, a Sydney-based renewables analyst for Rystad Power says that we shouldn’t be wanting producing capability – specific with rooftop photo voltaic and residential battery storage being put in in so many Aussie houses. However there are issues that there might be shortfall of “dispatchable” power sources, notably on scorching days when air conditioners get cranked up as folks attempt to beat the warmth.
“Dispatchable capability feels too shut for consolation,” says Dixon, “particularly if there may be an unplanned outage at one of many 4 remaining coal fired energy crops throughout a peak interval – a scorching summer season night or chilly winter night.”
Costs set to rise (once more)
There are additionally warning indicators for electrical energy costs as nicely. With much less dispatchable coal able to plug the gaps, fuel mills will likely be relied on. And as we all know all too nicely, fuel costs have been off the charts since Russia invaded Ukraine.
“We anticipate costs to rise post-Liddell as fuel or hydro set the worth extra of the time in New South Wales, with much less coal within the system. The important thing query is how excessive will fuel costs go? Notably in winter when fuel demand is excessive,” says Dixon.
As Dixon notes, hydropower is a dispatchable supply of renewable power. And there have been two important pumped hydro storage initiatives launched to bolster provide as coal departs. Nevertheless, delays have struck key initiatives. Dixon notes that Snowy 2.0, ex-PM Turnbull’s pet undertaking, has seen its completion delayed from the top of 2026 to 2027. And a Kurri Kurri growth has additionally been pushed again to December 2024.
The underside line of the brand new post-Liddell world is that whereas renewables are rising to the problem, the chaotic approach this stage of power transition has been managed is leaving lots to be desired.
It has been a little bit of mantra of mine in 2023, however it’s more true in the present day with Liddell’s closing than ever earlier than: Rooftop photo voltaic and residential batteries is the easiest way for Aussie households and small companies to take energy into their very own palms, have management over their costs, and, by doing so, plug the hole left by the departing coal clunkers.
It’s factor that coal goes the best way of the dinosaurs. Now could be the time for distributed and rooftop PV, made dispatchable via residential battery storage, to step up and fill the void.
