Guest essay by Eric Worrall
According to the Australian Energy Market Operator, a government body charged with managing the Australian electricity grid, Coal plants are vital to contain end user electricity costs.
Coal needed for decades to keep Australian power prices down: AEMO report
AAP, Claire Bickers, News Corp Australia Network
21 minutes ago
COAL-FIRED power will be needed for decades to come to keep power prices down and the lights on as the Australian energy market transitions to renewables, the Australian Energy Market Operator says.
In a report to be released today, the AEMO says extending the life of coal-fired power stations is the most viable way of keeping energy prices down as the transition takes place.
It also predicts replacing Australia’s existing coal-fired network would cost between $8 billion and $27 billion by the mid-2030s.
AEMO’s analysis says that based on the projected cost, the cheapest option would be to “retain existing resources for as long as they can be economically relied on”.
“Over the next 20 years, approximately 30 per cent of the NEM’s (National Electricity Market’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,” it says.
Meanwhile, a Newspoll conducted for The Australian has found voters believe the federal Coalition is best placed to keep power prices lower and maintain reliable energy supply.
The Turnbull government is leading Labor 40 per cent to 34 per cent on the question of which party had the better approach to energy.
This represents an eight-point turn around from a similar poll conducted in May when voters backed Labor on this issue.
Read more (paywalled): Weekly Times
What happened since May to create a surge in Australian voter support for fossil fuels? The answer of course is Winter. Large numbers of Australians have endured a series of cold fronts – not cold in US terms, but pretty cold for us sun loving Aussies.
As most people in Australia receive their power bills monthly or quarterly, I suspect many poll respondents have had an opportunity to notice a nasty upward spike in their home heating bills, and have responded by rapidly ditching their love of our renewable future in favour of demanding more affordable energy.
Update (EW): fixed a typo (h/t Marcus)
Update (EW): AEMO report available below.
Over the 20-year plan period, AEMO anticipates the retirement of a substantial portion of the NEM’s conventional generation fleet. A significant number of coal-fired generators in the NEM have either advised that they are closing or will reach the expected end of technical life in this plan period. Collectively, the generators expected to retire by 2040 produce around 70 terawatt hours (TWh), or 70,000 gigawatt hours (GWh), of energy each year. This is close to one-third of total NEM consumption. In addition to providing critical energy production and dispatchable power, conventional generators have also traditionally been relied on to provide essential grid security services, such as inertia, system strength, and frequency control.
To support an orderly transition, ISP analysis demonstrates that, based on projected cost, the least-cost transition plan is to retain existing resources for as long as they can be economically relied on. When these resources retire, the modelling shows that retiring coal plants can be most economically replaced with a portfolio of utility-scale renewable generation, storage, DER, flexible thermal capacity, and transmission.
Within the plan period, under AEMO’s Neutral ISP planning scenario, the analysis projects the lowest cost replacement (based on forecasted costs) for this retiring capacity and energy will be a portfolio of resources, including solar (28GW), wind (10.5 GW) and storage (17 GW and 90 GWh), complemented by 500 MW of flexible gas plant and transmission investment. This portfolio in total can produce 90 TWh (net) of energy per annum, more than offsetting the energy lost from retiring coal fired generation.
Read more: AEMO Report