AEMO to Canberra: New Queensland coal-fired plants are not needed

The Morrison Government will not underwrite new Queensland coal-fired power plants, despite intense lobbying from Queensland Nationals.

The Federal Liberal-National Coalition yesterday released a short list of recipients of its Underwriting New Generation Investments Program. The only coal-fired generation included was an upgrade to the Lake Macquarie power station in NSW.

Earlier this month, six Queensland Nationals wrote to Nationals Leader Michael McCormack demanding the government underwrite new coal-fired stations in North Queensland.

No need for new Queensland coal-fired power plants

However, the Integrated System Plan released by the Australian Energy Market Operator (AEMO) last year shows there is no place for Queensland coal-fired power plants in the future energy mix.

No need for coal in future power plan says Australian Energy Market Operator.
No need for new Qld coal plants in future power plan says Australian Energy Market Operator.

“Due to the geographic and electrical distance between North Queensland and major load centres, transmission losses will be a key consideration for further development in this region,” the Plan states.

It adds that “further large-scale generator connections are unlikely to be efficient in North Queensland until existing thermal generation in Central Queensland starts to retire.”

This retirement will happen in the 2030s. If the government’s aim is to underwrite power to lower electricity prices now, new coal plants are not the answer.

Retiring coal plants replaced by renewables and gas

The ISP makes it clear that “retiring coal plants can be most economically replaced with a portfolio of utility-scale renewable generation, storage, DER [distributed energy resources, i.e. rooftop solar], flexible thermal capacity, and transmission”.

AEMO says to replace its retiring coal plants Australia will need:

  • solar (28 GW)
  • wind (10.5 GW)
  • storage (17 GW and 90 GWh)
  • flexible gas plant and transmission investment (500 MW)

AEMO states this combination of power sources and transmission reforms could produce 90 TWh (net) of energy annually. It claims this is “more than offsetting the energy lost from retiring coal fired generation”.

New transmission to connect renewable generators to grid

The Plan stresses the importance of improved transmission networks to get energy from remote sites to the main grid.

For example, a solar farm in a remote rural location needs a connection to the grid. However, part of AEMO’s Plan is to create REZ – Renewable Energy Zones – that already have access to transmission lines. The idea is to add renewable energy in areas that have access, then extend to new renewable hubs.

The Plan also stresses timing and insists that there is time to prepare for the retirement of existing coal plants. What the Plan does not need is politically-driven new generation that satisfies short-term political gains while ignoring detailed planning from the national energy market operator.

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