Australia’s energy transition is stalling. There are lots of reasons for this, including global delays for equipment and resources, and social licence issues associated with electricity transmission and renewable energy projects.
These delays put at risk the achievement of national and state emissions reduction targets. Compounding the problem is that governments are now looking to keep coal power stations in the energy system – like Loy Yang A in Victoria, which will now stay open until 2035, and Eraring in NSW, which the NSW Government is considering extending.
We know that the fastest way for our economy to decarbonise is to accelerate the ramp-up of renewable power and to prioritise the exit of coal generation above all else. And while Australia’s emissions from coal power stations are reducing, they continue to represent a significant proportion of our total emissions. It makes sense, therefore, that if we want to meet our emissions reduction targets, we should focus on how to remove coal from the system.
Removing large, coal power stations from the energy system is not without its challenges, however it is far from an impossible feat, as demonstrated in South Australia.
Since the state’s last coal power station closed in 2016, South Australia has positioned itself as a world leader in renewable energy. In fact, there are times when renewables meet 100 per cent of the state’s power needs.
However, the experience in South Australia has also shown that when the sun isn’t shining and the wind isn’t blowing, significant volumes of dispatchable energy are required to support the reliability and security of the energy system. This is where gas comes in.
Gas is critical to providing reliability and long duration firming. For example, from 28 April 2023 to 2 May 2023, gas powered generation provided over 65 per cent of peak electricity consumption at 7.00pm in three out of five days, due to periods of low wind and solar generation.