EnergyAustralia boss issues coal power shutdown warning
Household bills could spike again if coal plant closures aren’t managed better, says EnergyAustralia’s boss.
EnergyAustralia chief executive Cath Tanna says Australia must get better at managing the closure of large power stations, with no margin for error as 12 mainly coal-fired plants face retirement in the next 30 years.
Ms Tanna said consumers had paid for the industry to learn the lessons of the 2017 Hazelwood closure, which sucked 25 per cent of Victoria’s baseload power out of the system, even though the withdrawal had long been anticipated.
“Now, the stakes are even higher: when Hazelwood shut, we lost the slack in the system. Today, there is no margin for error,” Ms Tanna told the AFR National Energy Summit.
“If replacement capacity isn’t ready to go, and we haven’t planned to manage impacts on communities, we will repeat Hazelwood.”
The Hazelwood closure spiked annual household electricity bills 20 per cent higher as the wholesale market contracted, and sparked a fight between the federal government and AGL Energy over the scheduled closure of the Liddell coal fired plant in 2022.
Ms Tanna said decarbonisation of Australia’s energy system via the closure of coal-fired plants and increased renewable energy was inevitable.
“It isn’t whether we’ll get to net zero-emissions, it’s when and it’s how.”
Her comments come amid a continuing stand-off over national emissions policy and complaints from generators and financiers that policy uncertainty and heavy-handed interventions such as retail price caps and “big stick” divestment orders were deterring investment in necessary renovation of the national electricity market.
But Ms Tanna said the transition would not be exclusively about technology, as fairness had to be considered.
“It’s whether the clean energy transition will work for everyone in Australia, no matter where they live or how much they earn.
“Will we make energy cleaner, reliable and affordable for all? Or will people get left behind?
“The path has already been bumpier than it should have been. “
Ms Tanna said that the 107 recommendations of the Australian Competition and Consumer Commission review of retail prices and chief scientist Alan Finkel provided a blueprint for the reforms that needed to be undertaken.
“Technical engineering isn’t the problem. The challenge is putting all the pieces together to create a whole that’s affordable, simple and fair for customers.
“If the transition to a modern, cleaner energy system doesn’t work for families and communities, it will take longer and cost more than it needs to. “
Ms Tanna last year pitched a five-point plan to fix the energy crisis and said it remained a viable means to get the energy market back on track.
The plan included dropping the “big stick” rhetoric, committing to a national energy framework, sending the right signals for industry investment, lifting bans on gas development and backing the judgment of experts and independent regulators.