Australia States Waiting for Federal Go-Ahead to Transform Their Energy Grid

Since the Paris Agreement was signed in December 2015 the Australian energy sector has been trending away from fossil fuels. Electricity generation from fossil fuel sources has declined and has been replaced almost exclusively by wind and solar power. Decommissioned coal power stations have not been replaced with new coal or gas: instead, there is a long pipeline of hydro, wind and solar projects that is slowly coming online. The closure of coal power stations around Australia is proceeding ahead of schedule, with many companies choosing an early exit for their aging, inefficient plants. There is a problem though: none of this is happening fast enough, and there’s no government support for a managed transition away from fossil fuels.

Scheduled coal closures in the Australian electricity sector (individual power plants labeled)

The growth of renewables in the Australian electricity sector has been constrained by several factors. Outdated transmission networks have meant that newly-minted renewable energy projects haven’t been able to deliver their full capacity, with some struggling to even connect to the grid in the first place. Sadly, these transmission problems tend to occur in areas where wind and sun resources are highest.

Already in 2019, two renewable energy companies have left the Australian market, citing frustrations with transmission and regulatory issues, as well as a total lack of support from the federal government. Established companies have plans to replace their current coal power with renewable alternatives, but the government isn’t letting them get on with the job. For instance, the current energy minister is seriously considering either a massive taxpayer-funded subsidy to keep one of Australia’s oldest coal plants running another three years past its scheduled close or to forcibly acquire the power plant if its owners move to shut it early.

Even a relatively simple reform – the introduction of “demand response” into the market to curb excessive power demand on critical days – was resisted by some regulatory bodies and vested interests before finally being introduced last year. The same players are still resisting the introduction of a new market settlement rule that stands to benefit flexible generation sources like gas and renewables.

Activity Rating: * Falling Behind

Australia’s energy market operator has a detailed plan to transition the grid away from fossil fuels and carefully manage the exit of coal from the system. Victoria is set to break away from national electricity market rules and fund its own transmission upgrades to break the current bottlenecks. Queensland is plowing ahead with a huge line of solar, wind and storage projects that should push the state to 50% renewables by 205. New South Wales is formulating its own plans for how to drastically reduce reliance on its ancient fleet of coal power stations. The path forward is clear, but recalcitrant national bodies are delaying Australia’s transition. The Australian energy sector has been stuck in an uncomfortable limbo since Paris, and there are no signs it will be able to break out of its funk.

Take Action

Message

Dear Mr. Taylor,

As Minister for Energy and Emissions Reductions, you’ve had a front-row seat to the uncomfortable limbo the Australian energy sector is stuck in. Since we entered the Paris Agreement in late 2015, electricity generation from fossil fuel sources has been on a steady decline, and the slack has well and truly been taken up by renewables. Gas – long touted as a bridging fuel – has not increased its presence in our grid to the degree first thought, and its relevance is quickly fading. We have the blueprints, the materials and the desire to refurbish our grid to a 21st-century standard, now all we need is the go-ahead.

We urge you to stop resisting the inevitable transition of our grid and embrace solutions as they currently stand. There is no need to cling to aging fossil fuel assets, but there is a need to responsibly plan for what they will be replaced with. The states are all breaking away from federal guidance on energy reform, convinced they are in a better position to dictate their energy future. Your guidance doesn’t need to be difficult or heavy-handed, and you stand to better fulfill the benchmarks of your Energy and Emissions Reductions portfolio.

Send Action Alert Message to:

Honorable Angus Taylor MP

Minister for Energy & Energy Reductions

18 Hill Street Camden

Camden NSW 2570

Telephone: +612 4658 7188

angus.taylor.mp@aph.gov.au

@AngusTaylorMP

Resources

https://opennem.org.au/energy/nem

https://www.energynetworks.com.au/news/energy-insider/the-demise-of-coal/

https://reneweconomy.com.au/agl-hints-at-early-exit-from-coal-to-meet-1-5c-climate-target-67735/