Why coal is burning a hole in your pocket

Coal will continue to hurt your household budget if we don’t act now. And low-cost power comes in the form of renewables – wind, solar and batteries.

If I had a dollar for every column inch written about inflation, I’d be the one person in Australia with an instant solution to the cost-of-living crisis.

It’s no secret Australians are hurting. The increasing cost of electricity is affecting not just households, but businesses small to large, and particularly energy-intensive industries often located in regional areas.

And even as inflation begins to ease, there is one factor that will continue to hurt your household budget if we don’t act now.

Coal.

The truth is coal-fired power is burning a hole in your pocket.

About two-thirds of Australia’s electricity is supplied by coal.

Not only have we had to deal with the disruptions to coal supply, but the power stations that run on coal are old and unreliable.

Just like an old car, old power stations break down more, are less efficient and are more costly to maintain and run.

The best way to bring down power prices is to remove the ageing and unreliable assets and replace them with low-cost generation. That comes in the form of renewables – wind, solar and batteries.

It should be backed up with gas for about 10 per cent of the time that the wind isn’t blowing and the sun isn’t shining.

Renewables are the cheapest form of new build electricity, including with the investment required in transmission infrastructure. That’s a fact. The research comes from the CSIRO and the Australian Energy Market Operator (AEMO).

Just a few days ago, AEMO warned “imminent and urgent” investment was needed or we could breach reliability standards as early as this summer in Victoria and South Australia and within two years in NSW.

But amid the dire warnings, I’m positive about the transition to renewables.

While any change is challenging, when doing the right thing aligns with economics, you get speedy results.

Look at rooftop solar. If you have it on your home, did you install it because you wanted to do your part to stop climate change? Or did you do it because it would help the family budget?

I’d guess it’s both.

Last summer, rooftop solar generation grew by almost 20 per cent. Hundreds of thousands of Australians are choosing to do the right thing for both the climate, and their budgets. Now it’s time for industry to do the same.

A transition to renewable energy will bring cheap and reliable electricity to everyone.

The faster we do that, the faster we bring prices down.

Waiting for solutions that
are 15 years away will merely lock us into higher prices for another 15 years.

We need rapid change and we are already on the renewable energy transition path, so we need to stay the course.

If we don’t, households will continue to face bill shock and we’ll put jobs at risk in those energy intensive industries that need cheap power to operate.

Delaying action is not the answer. Continuing to rely too heavily on coal-fired power stations keeps us at the mercy of ageing, unreliable, power stations. We need to upgrade. There is a strong pipeline of renewable energy projects ready to be delivered – working with all levels of government, industry and community, we can achieve our goals and ensure we keep the lights on.

We have the opportunity to deliver a strong regionalised economy powered by an expansive renewable energy industry, supporting thousands of jobs directly and indirectly across Australia.

Change is never easy.

The renewable transition is challenging, but I know as an industry we can get faster,
more efficient and more local as we build out Australia’s new renewable energy generation assets.

Failure to take action is an active decision to lock us into high power prices.

We all want a future with cheap, reliable energy – let’s get on with it.

Jason Willoughby is chief executive of Squadron Energy, the private renewable
energy company owned by Andrew Forrest.