Even the world’s top coal exporter is struggling to make money from burning the fuel.
Australia’s coal power plants, which make up more than half of the nation’s generation mix, are facing increased pressure as rooftop solar hollows out daytime demand. That could mean early closures among the country’s aging fleet, giving energy planners the tricky task of ensuring energy security while replacing the steady, predictable flow of power with more variable renewable generation. “We’ve got a problem with coal closures,” Kerry Schott, chair of the Energy Security Board, told a virtual clean energy summit on Thursday. ‘We’ve got plants that are becoming uneconomic and some have got very tight margins at the moment.”
Australia’s Power Mix
Renewables gaining importance at coal’s expense
Dept. of Industry, Science, Energy & Resources
Australians love of rooftop solar is also under-cutting coal plants. Almost one in four Australian households has panels, and there’s still scope for solar capacity to jump by 500% by 2050, according to BloombergNEF. Australia’s coal fleet is mostly owned by the country’s three big power companies: AGL Energy Ltd., Origin Energy Ltd. and the CLP Holdings-owned EnergyAustralia. AGL’s Liddell facility will kick off a raft of retirements over the next decade with a phased shutdown from 2022.
For many, those closures will be necessary if the world is to meet its long-term targets for curbing the rise in global temperatures. “As it stands now, if they continue to operate as they run then it is impossible. We can forget reaching hard climate targets,” International Energy Agency Executive Director Fatih Birol told the same conference on Thursday.
