Regulators

By 2043, Australia will no longer require coal-fired power, according to a market operator.

Published on: 10 December 2021 11:35 AM
by KnowESG
The Liddell coal-fired power station is pictured in the Hunter Valley, north of Sydney, Australia, April 9, 2017.
The Liddell coal-fired power station is pictured in the Hunter Valley, north of Sydney, Australia, April 9, 2017.

A Brief Summary

Australia can phase out coal-fired power by 2043 even as electricity demand soars. Base case for the National Electricity Market Operator's plan would require A$12 billion ($8.6 billion) in network investments. Renewable generation capacity will grow to 140 gigawatts (GW) from the current 15 GW.

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Even as electricity consumption rises, Australia can phase out coal-fired power by 2043, according to a draught plan for electricity investments that will be required to achieve net-zero carbon emissions by 2050, released on Friday by the energy market operator.

As coal facilities are retired, the Australian Energy Market Operator's (AEMO) base scenario envisions a rapid change of the National Electricity Market (NEM), with significant investment in renewable generation, energy storage, backup generation, and transmission.

"Under this scenario, the NEM will be coal-free by 2043," said AEMO CEO Daniel Westerman in a statement.

"This would necessitate a significant expansion in battery and pumped-hydro storage, as well as hydrogen or gas-fired generation for peak demand," he said, adding that "all of this will be supported by a market that incentivizes energy users to modify demand based on system conditions."

According to AEMO, the plan would necessitate A$12 billion ($8.6 billion) in network investments.Over the next three decades, the market operator forecasts grid power demand to roughly double to 330 terawatt-hours (TWh), as transportation, heating, cooking, and some industrial operations become electrified.

Renewable energy capacity is expected to increase by more than doubling per decade through 2050, reaching 140 gigawatts (GW) from the current 15 GW. Rooftop solar, on the other hand, is predicted to increase from 15 GW to 70 GW during the same time span, according to AEMO.

It expects coal-fired capacity to quit the market two to three times quicker than planned, with 14 GW of the industry's 23 GW expected to go by 2030, compared to the 5.4 GW that plant owners currently plan to retire by then.

"Their decisions are inherently uncertain," AEMO noted in its draught plan, "as they battle with operating dynamics in the face of cheap renewable production, their own competitive strategies, plant conditions, regulatory and cleanup costs, and the wishes of local communities."

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