Power games require more than a dash of pragmatism
Delaying the withdrawal of coal may be the trade-off for getting through a thorny transition to renewable energy this decade.
Fifteen months ago, the Albanese government claimed an election victory with several bold energy pledges. It promised to slash $275 off household power bills by 2025 and made an ambitious pledge to more than double the level of renewable energy in the system to 82 per cent by 2030.
It’s been a tough slog ever since.
Last winter saw the shutdown of the national electricity market amid extreme challenges in avoiding power shortages.
Electricity and gas bills continued to surge and show little sign of easing more than halfway through 2023.
To top it off, the government’s energy scheme, the Snowy 2.0 hydro expansion in NSW, now faces a $6bn blowout and all original timelines are in the bin.
The market operator’s electricity outlook statement – released on Thursday – shows the transition to green energy this decade will be anything but smooth.
The ambition is crystal clear – switching an essentially coal-based power grid to renewables by the end of this decade.
The reality is proving much more difficult than envisaged.
Part of that is down to familiar bugbears – big, complex transmission projects that are struggling to get community support and taking longer than expected to gain momentum.
A spree of wind, solar and battery projects continue to be built but the back-up power needed to keep a stable energy supply running 24/7 also requires difficult hydro developments and more gas plants to be brought online.
All of this is taking place as big coal plants such as Liddell exit the system and the giant Eraring coal station considers a shutdown in 2025 – a fresh headache for the NSW government.
There’s much to occupy the mind of Energy Minister Chris Bowen. He’s sought to blame the Coalition for the state of the market but knows that line is starting to wear thin. AEMO is now demanding a bulging pipeline of energy projects get sanctioned and are delivered to the market, easing a forecast crunch that could hit states like Victoria this summer.
Bowen needs to find a way to use this road map to fast-track investment, but a dash of pragmatism is also required. Australia can’t shoot itself in the foot. Delaying the withdrawal of coal may be the trade-off for getting through a thorny transition this decade.
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