Essay by Eric Worrall
Only the most committed green states are closing coal plants.
Souring renewables investment outlook extends life of coal generators
Leith van Onselen
Monday 17 August 2026Investors in renewables say confidence in the Australian energy market is declining.
A national investor survey by the Clean Energy Investor Group (~140 respondents) found that 77% of respondents believe Australia’s clean energy investment landscape has deteriorated over the past 12 months:
Transmission bottlenecks are the number one concern, followed by planning approval delays, grid connection issues and negative pricing:
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Coal plants to remain operational for longer:
According to the latest version of AEMO’s flagship report, the 2026 ISP released in June, over 5 GW of coal is scheduled to close in 2029.
By 2035, Australia is scheduled to have lost around 15 GW of coal capacity, almost all from Victoria and NSW.
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Not surprisingly, the media reported last week that the NSW government is actively examining extending the life of the state’s coal-fired generators
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Read more: https://www.macrobusiness.com.au/2026/08/souring-investment-outlook-for-renewables-extends-life-of-coal-generators/
Why are renewable operators experiencing negative pricing? Because despite the hundreds of billions spent on renewables, there is still no viable means of time shifting renewable output to when people actually need the energy. Solar and to a surprising extent wind output peak around midday, then decline towards night time, when demand for home heating kicks in.
So by the time the generated electricity is worth anything, the day is over for renewable operators.
Various pumped hydro schemes and batteries are supposed to make a difference, but they’re not working. Batteries are way too expensive to provide meaningful capacity. And pumped hydro has turned out to be ruinously inefficient and way more expensive than anticipated, thanks to geological challenges of drilling long tunnels through unstable mountain terrain.
The federal government is trying to rescue their collapsing net zero programme by forcing AI companies to build enough green infrastructure for themselves and everyone else, but a state led rebellion against AI green mandates has thrown this coercion plan into turmoil.
On top of all this, a heavy handed attempt by the Federal Government to deflate Australia’s housing bubble has threatened to tip the entire economy into a Chinese style housing crisis led recession. Part of this deflation measure, punitive capital gains taxes which treat capital gains as equivalent to wage income, have wrecked the economics of risk taking investment in Australia.
The final straw which broke renewable investment in Australia, the anti Net Zero rebel party One Nation is riding high in every opinion poll. Senior One Nation Federal Senator Malcolm Roberts, whom I’ve met and spoken to in person, absolutely hates renewables – he has spent a large part of his career attacking renewables and renewable subsidies.
Unfortunately the government has shown no sign of backing off their train wreck economic policies – they’re blaming everyone but themselves for Australia’s cluster crisis.
Let’s hope there is still something left to save by the time Australia gets its chance to pass judgement on this government’s performance.
Update (EW): Added an extra paragraph to the quote, about the NSW government considering extending coal plants.
