Australia must slow coal exits to safeguard affordability Alinta Energy CEO urges

Alinta Energy - the country’s fourth largest retailer - says closures of coal powered stations must slow to help households already struggling to pay bills.

Prime Minister Anthony Albanese with Alinta Energy CEO Jeff Dimery at the Future Energy Conference. Picture: Julian Andrews

Australia must slow the closures of coal power stations to prevent surging power bills damaging households and businesses already battling a cost of living crisis, the head of the country's fourth largest electricity and gas retailer has urged.

Australia has set an ambitious target of having renewable energy generate more than 80 per cent of the country’s power needs by 2030, a central pillar in the country’s plan to be net zero by 2050.

In comments that will intensify debate about the cost of the energy transition, Jeff Dimery - chief executive of Alinta Energy - said slowing the closures of coal power stations must be prioritised or households will endure more and more pain.

“I think we must slow down the pace of closing existing coal power stations a little bit. We are very good at taking higher emitting baseload generation out of the system but not so great at replacing it, and the economic signal is not strong enough at this time,” Mr Dimery told The Australian.

“Lets not increase the burden on the consumer because prices are rising.”

Australia is battling a cost of living crisis that is weighing on support for the federal Labor government, but there is growing pressure on the country to achieve its net zero aspirations.

Mr Dimery said Alinta shares the government‘s ambitions but said there is undeniable evidence of the economic toll of rising prices.

“We have millions of people relying on subsidies and support to pay their energy bills, and I agree we had to do it but we can‘t be subsidising forever,” said Mr Dimery.

The Australian Energy Regulator in June revealed the number of households on hardship payment plans to repay electricity bills surged by 19 per cent during the first quarter of 2023, underscoring the impact of recent increases in bills.

The surge came before many households endured an increase of more than 20 per cent, the second such rise in as many years.

Eraring Power Station, New South Wales' largest coal-fired power station. Picture: Hollie Adams

The comments came as Mr Dimery shared the stage with Prime Minister Anthony Albanese at News Corp’s Future Energy event in Sydney.

Mr Albanese acknowledged many Australians are struggling, and recent government intervention had blunted the rise in power bills.

To lower bills in the future, Mr Albanese said Australia must rapidly advance the development of new renewable energy generation, which he said would drive economic growth.

“My government’s vision is for Australia to be a renewable energy superpower, which will in turn help us become an advanced manufacturing powerhouse,” Mr Albanese said.

“Energy is the spark that drives the jobs, the community, the cities, the industry and the very country we want.”

The scale of the transition envisaged by the government is daunting.

Coal is still the dominant source of electricity in Australia, with the 20GW of capacity accounting for about 60 per cent of the country’s power. To replace coal, however, Australia will need to build significantly more capacity than the amount of coal already in the system due to the intermittent source of renewable energy.

The government believes the transition to renewable energy can be accelerated by building new transmission lines.

About 10,000km of new lines must be built before 2030, but their development has been hampered by funding constraints and community opposition.

The federal government has said its $20bn Rewiring the Nation, which offers cheap loans and concessional finance to transmission developers, will break the bottleneck.

Mr Dimery, however, said Alinta supports the build for transmission lines, but the costs will eventually flow through to consumers - and when comparing new renewable energy projects - it must be done on a like-for-like basis.

“The government fundamentally believes that renewable energy is the cheapest source of new energy, and I agree with them. But if you’re comparing the cost of that energy to new energy then that is a different equation,” said Mr Dimery.

While the Mr Dimery’s believes coal generators should stay due to limit the impact on consumers, Australia may be forced to prolong the traditional source of its energy anyhow as the country struggles to build enough renewable energy generation.

Earlier this month NSW said it will seek an agreement with Origin Energy to prolong the lifespan of the state’s largest coal power generator. The Eraring coal power station - which provides about 25 per cent of NSW’s electricity needs - was set to retire in 2025 but is now likely to have to stay open for a couple more years.

Other states are also facing a generation shortfall. The Australian energy market operator warned in August the country requires urgent investment in new generation or the country faces a decade when electricity supplies can not be guaranteed.

Originally published as Australia must slow coal exits to safeguard affordability Alinta Energy CEO urges