After more than five decades, the last operational units of the Liddell coal-fired power station will close this month. The owner of the station, AGL, is from Australia largest carbon polluter. Liddell’s closure will reduce the company’s emissions by 17%.
Liddell, in the New South Wales Hunter Valley, is from Australia oldest coal station. It started in the early 1970s – about the same time as the release of the Datsun 180B and before the Sydney Opera House officially opened!
Just as a Datsun 180B was a great car in its day, Liddell was the cheapest and most reliable power generation technology in the 1970s and 1980s (that is, if you discount the long-term cost of carbon).
But like all coal-fired power plants in Australia, Liddell’s performance turned down as it got older. It became unreliable and inefficient. One unit of the station closed last year, leaving three in operation.
Governments must act to ensure that our electricity grid does not fall short when coal-fired power plants close. But the demise of facilities like Liddell means Australia has a one-time chance to become a global energy superpower.
Life after Liddell
AGL announced the decision to close Liddell in 2015. Virtually no one in the energy industry objected to the move, but it caused endless political debate.
Some politicians are still protesting Liddell’s retirement. Federal Nationals leader David Littleproud said this week the shutdown should be delayed to avoid supply problems, and suggested that Australia should have an urgent talk about building nuclear power.
But closing Liddell is unlikely to cause the lights to go out in NSW. For now, the state has enough remaining capacity to ensure reliable supplies.
In the eight years since the decision to close Liddell, there has been large scale renewable capacity in NSW preppedlike new solar energy on the roof.
A lot of new “bracing” capacity is also being developed, ie flexible energy capacity that can be activated if renewable energy sources fail to produce energy or if the demand for electricity suddenly increases. Projects under construction in NSW include the Kurri Kurri and Tallawarra gas-fired power stations, the Waratah “super battery” and the Snowy 2.0 pumped hydro project.
When electricity consumption in NSW is at its highest, approx 14,000 megawatts power is needed. Without Liddell, roughly 13,500 megawatts coal, gas and hydropower production is available.
Add to that the existing wind and solar capacity, plus energy that can be imported from Victoria and Queensland via transmission lines, and the total generation capacity in NSW appears to be more than enough.
However, the reliability of part of this remaining capacity, namely the remaining coal-fired power plants, is becoming less and less certain. That’s why the energy industry is looking past Liddell, to the closure of Eraring’s coal-fired power station in 2025, and others to follow.
Read more: Global coal use in 2022 hits record high, but Australia bucks trend
All eyes on Eraring
Modeling by the Australian Energy Market Operator shows the closure of Eraring put pressure on the remaining electricity supply. However, it says the market would still meet the “reliability standard” even if no new projects are developed.
According to that standard, the expected unserved energy demand (leading to blackouts) should not exceed 0.002% of the total energy consumption in a region. The standard assumes that an occasional blackout is inconvenient, but that it is infeasible to completely shut them down because it would require building expensive power plants that are rarely used.
Blackouts may become more frequent if extreme weather conditions or coal units fail – what happend at Queensland’s Callide C power station in 2021. But blackouts are still far more likely to result from a power line problem in your street than a lack of generating capacity.
Over to the Minns government
No electricity shortages are expected for Australia in the short term. But to ensure a smooth transition to clean energy, we need to develop new renewable energy and reinforcement capacity ahead of coal closures.
The earlier-than-expected closure of coal-fired power stations remains a possibility – as happened with Victoria’s Hazelwood coal-fired power station due to prohibitive repair costs.
We have previously recommended a “waiting room” for capacity that can be quickly brought to market if needed. Batteries and pumped hydro power would be developed prior to coal closure and marketed once coal is abandoned.
The NSW Minns Labor government can also drive forward investment through an existing policy called the NSW Energy Roadmap. This means that the Australian energy market operator is asked to respond long-term contracts to underwrite new renewable energy and reinforcement projects, to help mitigate the financial risks advocates face.
A tender round is already underway, but it can be accelerated. Seen global energy crisis, it can be worthwhile to commission projects now, even if delivery is not required until later. This is a much better way to manage reliability than, say, the NSW government using taxpayers’ money Buy Experience – an option that NSW Labor put on the table ahead of last month’s state election.
In the longer term, construction of sustainable generation needs to scale up drastically to ensure energy reliability and meet emission reduction targets.
This will be a challenge. But we can take courage from it news this week that under the federal Albanian government renewable energy projects are being approved twice as fast as in previous years.
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A new era
There is more work to be done to ensure that the electricity grid can withstand closures of coal-fired power plants.
Many new transmission lines need to be built to transport electricity from renewable energy generators to the grid. And the continuous development of renewable energy zones – clusters of large-scale sustainable energy projects – will make setting up new projects faster and easier.
Importantly, local communities and First Nations people must be involved and consulted during the transition.
But while adapting to coal’s exit poses challenges, nuclear power in Australia is unlikely to be the answer.
Australia has world-class wind and solar resources – enough to eventually produce clean, cheap energy for ourselves and for export. Technologies such as batteries, hydrogen and hydropower will fill the gaps when needed.
Generating energy from emerging nuclear technologies in the form of “small modular reactors” as proposed by Littleproud will still more than double the cost of Australian renewable energy boosted by batteries or other storage technologies, even under the most ambitious scenarios. This gives Australia a global competitive advantage.
Liddell’s closure is a historic moment in the Australian energy landscape. Now, with adjustments to existing policies, the new NSW government can increase reliability, lower electricity prices and move towards net zero.
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