Coal generation continues to slide, LNG booming: EnergyQuest

Coal generation in the national electricity market is falling but the fossil fuel still accounts for 60 per cent of supply for the power grid.

The share of coal power generation in Australia fell slightly to 60.4 per cent in the fourth quarter of 2021 after plunging to a record low in the prior three-month period.

Coal generation in Australia’s national electricity market continues to slide but the fossil fuel still accounts for 60 per cent of supply for the power grid, consultancy EnergyQuest says.

The share of coal power generation fell slightly to 60.4 per cent in the fourth quarter of 2021 after plunging to a record low in the prior three-month period, while gas power generation dropped to an all-time low of 4.2 per cent.

Two rejected takeover bids for AGL Energy by a Mike Cannon-Brookes fronted consortium included a pledge to shut the company’s giant coal plants by 2030, more than a decade earlier than planned in the case of Victoria’s Loy Yang A station.

EnergyQuest said the AGL play along with Origin Energy’s decision to consider closing Australia’s largest coal plant, Eraring, by mid-2025 underscored the accelerating move to renewables.

“Australia is about to provide a case study of the energy transition, with the accelerating closure of coal-fired generation on the east coast, including Origin Energy’s Eraring power station. We will soon see whether a major power system can provide reliable power with just wind, solar and batteries,” EnergyQuest chief executive Graeme Bethune said.

The “marketplace is sending overwhelming signals that it can be done, as seen in the actions of Origin Energy, Mike Cannon-Brookes and renewable project proponents lining up to invest in NSW.”

Australia also kept its crown as the world’s biggest LNG exporter in 2021 and was enjoying windfall profits as prices in Asia soar following the invasion of Ukraine.

The country exported 80.6 million tonnes of LNG last year, beating Middle East rival Qatar, while revenues continued to soar with prices doubling in the fourth quarter to $15.87 a gigajoule for Australian producers.

Australia’s LNG export revenue in January 2022 was $5.9bn, an increase of 113 per cent on a month-on-month basis and an average $62m per LNG cargo.

Qatar has ambitions to turbocharge its supplies with plans to add an extra 42 per cent of capacity taking its output to 110m tonnes a year.

Qatar Petroleum will add four LNG trains, each with 8.25m tonnes of capacity, equivalent to more than twice the capacity of Australia‘s largest export facility, the North West Shelf LNG plant in Western Australia.

Originally published as Coal generation continues to slide, LNG booming: EnergyQuest