Writing on the wall for coal-fired power stations

THE closure of Australia’s coal-fired power stations is “inevitable” with or without government intervention and planning must be done to ensure an orderly transition, according to a Senate committee interim report.

The Senate’s Environment and Communications References Committee tabled the interim report of its inquiry into the retirement of coal-fired power stations on Monday, which considered “how quickly and orderly” the plants would close and what supporting policies should be in place to ease the transition.

“It is inevitable that many of these coal-fired generators will cease operations in the medium term,” the report stated.

“This will be the case even in the absence of any further policy measures from government to encourage closure of these generators and further uptake of renewable generation.

“It is imperative that this reality is acknowledged by government, industry and the broader community, so that this transition can be adequately planned for and implemented at the lowest cost to consumers, taxpayers, workers and communities.”

The Labor and Greens-dominated committee found on average power generators gave four months’ notice ahead of upcoming plant closures and called for the government to establish a standalone statutory authority to oversee the implementation of mechanisms to close coal-fired generators.

The report stated closures were inevitable due to “the age and declining economic potential of Australia’s fleet of coal-fired power generators” and international obligations to reduce the nation’s carbon footprint under the Paris climate change agreement.

In the report the committee considered a range of closure options, including leaving decisions to the market, using policy to directly regulate outcomes and using market-based mechanisms.

The report comes in the wake of Engie’s announcement last month it would close Hazelwood on 31 March next year.

While the committee does not outline a timetable for closure, it does note the Climate Institute’s recommendation that “all existing coal-fired power stations” close by 2035 to restrict climate change to two degrees.

The two Coalition senators on the committee issued a dissenting interim report which highlighted the Federal Government’s efforts to reduce emissions, including its target of a 26-28 per cent reduction on 2005 levels by 2030.

“The energy sector is essential to Australian’s wellbeing and standard of living, and plays a pivotal role in Australia’s ongoing prosperity,” the Coalition senators’ said in their dissenting interim report.

“Energy security must be government’s number one priority.

“The transition to a lower emissions economy must be done in a way that maintains a secure and affordable energy supply to industry and households while transitioning to a lower emissions economy.”

The committee will release its final report by 1 February next year.