Source : https://www.reuters.com/markets/asia/aussie-coal-exits-put-dithering-government-spot-2022-02-17/
Australia’s government is trying to summon an energy-crisis spectre. On Thursday, Origin Energy (ORG.AX) revealed that it has asked regulators to allow it to close its Eraring coal-fired power station, the country’s largest, seven years early in 2025. A planned 700 megawatt storage battery, along with projects others are developing in the region, ought to take up the slack. But the ruling right-wing federal coalition parties are raising fears of supply shortages and higher prices. Their refusal to embrace the shift to renewables is the real problem.
Prime Minister Scott Morrison ought to be cheering Origin’s move. If Eraring closes before 2030, the federal government will find it even easier to hit its uninspiring greenhouse-gas emissions-reduction target of 26% to 28% from 2005 levels; the station’s current output is equivalent to 3% of the total that year. But the ruling Liberal-Nationals coalition has long supported fossil fuels and undermined or ridiculed solar and wind power. Morrison once brandished a lump of coal in parliament during an energy debate.
Renewables, though, have won the economic fight, not least thanks to a quarter of Australian houses being fitted with solar panels. Origin Chief Executive Frank Calabria bluntly pointed out that coal plants have been “put under increasing, unsustainable pressure by cleaner and lower cost generation”. They’re not cheap to run – Eraring costs some A$250 million a year, and that will increase as it ages. Rivals AGL Energy read more and EnergyAustralia brought forward closure times for some of their coal plants for similar reasons.
A better response from the government would be to help prepare for the switch so that there is no danger of supply shortages. That involves encouraging rapid adoption not just of renewable power, but also of battery storage and suitable transmission networks – and of electrified versions of everyday products from cars to stove tops to heating systems.
The political fight, though, is a slower burn. The federal government, facing an election within three months, last year deployed a delaying tactic with an emissions-reduction plan that has no real benefit for another decade or more and relies on technology unproven at scale like carbon capture. Such inaction is the big risk to a smooth energy transition.
CONTEXT NEWS
- Origin Energy on Feb. 17 said it has notified the Australian Energy Market Operator of its desire to close the country’s largest coal-fired power station, at Eraring in New South Wales, in August 2025, seven years ahead of schedule. The company was already planning to install an electric storage battery on the site which, at 700 megawatts, would be the country’s largest.
- The company made the announcement on the same day it unveiled a loss of A$131 million ($94.4 million) in the six months to the end of December. That was largely caused by an impairment charge and capital gains tax bill from selling a 10% stake in its Asia Pacific liquid natural gas project, totalling A$368 million. Excluding such items, underlying profit was A$268 million.
- On the same day, New South Wales Treasurer and Energy Minister Matt Kean announced that the private sector would build a separate 700 MW storage battery in the state.
Editing by Robyn Mak and Katrina Hamlin
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