Coal is Dying at 3X speed: Government’s Transition Plan Needed!

According to a report released last week by the Australian Energy Market Operator, coal is likely to be totally phased out of Victoria’s electrical system by 2032, with most other parts of Australia not far behind. The research, dubbed the 2022 Integrated System Plan, confirms what many of us in the energy policy community have long suspected: coal is on its way out, and the pace may surprise some industries and governments. The Integrated System Plan is the market operator’s planning “blueprint” for business and policymakers to analyze how Australia’s electrical system might evolve. It’s a crucial document for determining where and when investment is needed to meet the demand for new renewable resources. Given ISP’s forecast for rapid coal-fired power plant closures, it’s vital that governments don’t bury their heads in the sand. Denying the approaching demise of coal-fired power is simply not in the best interests of coal employees and their communities, who require immediate assistance. What does AEMO foresee? The most significant feature of the ISP is that the “Step change” has been renamed the “Central scenario.” For the first time, this primary scenario is consistent with Australia’s commitment to restrict global temperature rise to under 2°C under the Paris Agreement. According to the ISP, massive amounts of coal will be retired over the coming 10 years, including all brown coal and 2/3rds of black coal, with considerable investments in new renewables and “Firming technologies” to replace it. Around 14 gigawatts of coal are expected to be retired from the National Electricity Market this decade, more than three times the amount declared by the industry. AEMO sees more than just a surge in renewable energy investment. According to the ISP, a transmission outlay of roughly A$12.5 billion is required to generate $29 billion in investment returns. What is the purpose of leaving coal behind? Two major factors drive this enormous shift away from coal and toward new technologies. Woolworths, BHP, and Coles, among Australia’s largest and most recognizable companies, progressively purchase 100 percent of their energy from renewable sources. Second, state governments have stepped in to fill the hole left by the lack of nationally consistent energy and climate policy, enacting bold programs to promote renewable energy and firming. The NSW government’s 12GW energy plan is the most ambitious of these programs since it essentially takes over the retirement of aging coal-fired power facilities by enabling investment in new capacity. So, what are governments supposed to do? Governments must focus on a “Just transition” to these new technologies and support communities and people who will be most affected, such as those in the Hunter and Latrobe Valleys. Structural adjustment strategies such as job placements, relocation aid, or financial support to change local economies are critical to secure chances for these regions.

Miners will transition to a new or similar industry with retraining before closure. Everyone who
consumes energy should participate in the clean energy transition. Governments have been
conspicuously missing from this crucial policy discussion. Any future policies that assist in
adopting solar and battery storage in Australia should emphasize low-income and rental homes.
Governments must also make certain that the private sector bears the brunt of bad investments.
Governments are progressively taking on major risks by backing renewable energy and
securing large multi-national energy companies’ investments.
Alternative models for governments to attain the same goals, but with a stronger focus on
decreasing consumer hazards, have been proposed by certain economists. Given the rise in
families and companies purchasing renewable energy of their own will, it’s critical that
consumers understand what they’re getting. The Clean Energy Regulator is working on an
emissions and renewable energy transparency registry. Governments could impose a carbon
price if they truly intended to assist.
Such a policy is regarded as political poison, yet a carbon price would allow us to arrive there
this future in a much more cost-effective and orderly manner. The coal age has come to an end.
The ISP foresees a brighter, cleaner future. We’re blessed with some of the best renewable
resources on the planet, so we have a lot to gain from new industries like green hydrogen and
mineral processing. With global leaders increasingly focused on rapidly reducing emissions, we
have a lot to gain from moving beyond the coal age and into the age of efficient renewable
energy.
Despite the abundance of coal, the age of coal is coming to an end, whether governments
believe it or not.