Coal station closures inevitable, start planning: Labor and Greens
By Adam Morton
Many of Australia’s coal-fired power stations will shut in coming years no matter what the government does, but a national plan will be needed to ensure the lights stay on and price rises are limited while they are replaced with cleaner models, Labor and the Greens say.
A Senate inquiry into the retirement of coal plants heard that many energy companies, unions, community and environment groups agreed closures were inevitable and want the federal government to introduce policies to help manage the shift.
Hazelwood power station is to close.
Businesses making this case included AGL, the owner of the most coal-fired power generation capacity in the country.
The Greens-Labor dominated interim committee report says: “The question is not if coal fired power stations will close, but how quickly and orderly these closures will occur and what supporting policies if any will be in place to help manage the process.
“It is imperative that this reality is acknowledged by government, industry and the broader community, so that this transition can be adequately planned for and implemented at the lowest cost to consumers, taxpayers, workers and communities.”
The report says the closure of coal generation is being driven by the age of the plants – a quarter are at least 40-years-old – and Australia’s commitment under the Paris climate deal to cut carbon dioxide emissions.
French energy giant Engie earlier this month announced the country’s most greenhouse intensive power station, 52-year-old Hazelwood in Victoria’s Latrobe Valley, would shut in March, putting about 750 people out of work.
It will be the tenth coal plant to close in seven years. Including Hazelwood, Australia has 24 coal plants still in operation. Coal power provides 78 per cent of Australia’s electricity generation, and is responsible for nearly 30 per cent of national emissions.
Hazelwood plant and mine from the air.
The report considers a series of options for retiring coal including directing power stations to shut through regulation, government paying plants to close, and different types of market mechanism that put a cost on running high-emissions power plants.
It does not recommend a timeframe by which all coal plants should close, but cites modelling for the government’s Climate Change Authority that found they would need to be phased out by 2035 for Australia to play its part in the Paris commitment to keep global warming below 2 degrees.
Waubra wind farm, central Victoria.
The push for a national plan to manage coal closure was rejected by Coalition Senators.
In a dissenting report, they backed the role of the market and existing government policies, and said chief scientist Alan Finkel had been commissioned to develop a long-term energy strategy.
Citing the Australian Energy Market Operator, they warned government interference would lead to consumers and industry facing higher prices.
Liberal David Bushby said government’s role was to encourage and reward innovation, not pick winners. “Policies providing flexible, well-functioning and competitive markets that deliver certainty for industry and are technology neutral will best support the transition to a lower emissions economy,” he said.
Greens Senator Larissa Waters, chairwoman of the Environment and Communications standing committee, disagreed.
“If we don’t have a national plan for the orderly retirement of the remaining coal generators we won’t get the investment in clean energy we need for security, stability and a smooth transition,” she said.
Labor’s Sam Dastyari said: “Frankly, the decline of the coal-fired power industry, which is being increasingly seen as inevitable, is not victimless. Workers and families deserve some policy certainty.”
The report recommends that the government expand the national electricity objectives – which drive all decisions – to include the need to cut emissions as well as maintain energy security and limit price rises, and introduce a comprehensive energy transition plan to be overseen by a new transition authority.
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