At a time when many countries in the world are moving to abandon coal-fired power plants, the Australian government is taking a step forward and another backward, amid the insistence of the Canberra government to stick to coal plants, in order to secure the demand for electricity.
Australian ministers plan to hold a meeting this month – which is expected to be divided – to discuss the continued operation of coal-fired plants to ensure the efficiency of the country’s electricity generation system during the energy transition to reduce greenhouse gas emissions.
The proposal, known as the “capacity market”, would provide a strategic reserve of electricity, to be used in emergency situations, but a number of ministers announced their rejection of the controversial proposal, according to the Argus Media platform.
Federal Energy Minister Angus Taylor said a “capacity market” is needed to allow more renewable energy to come in.
The “capacity market” is a mechanism introduced by the government to ensure that electricity supplies continue to meet demand as more and more unpredictable renewable power plants come into operation.
Having this mechanism ensures sufficient capacity to generate or manage loads in the system to handle times of stress on the grid, such as wind power outages or increased demand.
The “Power Market” aims to achieve long-term security of electricity supply, provide low-carbon energy, as well as reduce costs for consumers.
A few weeks ago, the annual forecast report for the national electricity market showed the opposite of the minister’s claims about the “power market”.
The report attributed this to the fact that the planning of the transmission infrastructure allows the transfer of supplies from one state to another, in addition to the additional maximum capacity gas-powered, which will be built in the most populous state of New South Wales, such as the 316 MW gas-fired power plant in Talawara And a gas and hydrogen power plant in the port of Kembla with a capacity of 635 megawatts.
These backup stations are expected to provide the electricity needed to maintain the reliability of the grid.
Risks of shortage of supplies
For its part, the Australian Energy Market Operator (EEMO) said in its 2021 ESO Electricity Opportunity Statement that there are several generation, storage and transmission projects that will help mitigate the risks of supply shortages.
He pointed out that about 62% of the electricity in the national electricity market comes from coal plants, about 30% from renewable energy sources, and about 8% from gas.
The report predicted that renewable energy sources would rise over the next 12 months, taking a larger share of coal and gas plants in the market.
The Australian Energy Market Operator (EEMO) performs a range of gas and electricity market functions, operations, development and planning and manages the national electricity market.
Transition to a clean economy
In recent weeks, Australian states have revealed more of their policies to transition to a clean economy.
States have shown little interest in subsidizing older coal-fired plants, which are becoming less profitable as renewable energy gradually feeds into market share.
Electricity generation from renewables doubled from about 15% in 2017, when coal accounted for 71% of the energy supply, with gas making up the rest.
Experts see the capacity market mechanism as a cynical attempt by Canberra to keep coal production and coal-fired plants as long as possible.
Supporters of the renewable energy sector believe that new energy sources will eliminate future investment in the coal sector, including green hydrogen projects.
In the same context, Canberra approved the plan of the Australian coal mining company “Wollongong”, owned by one of the Indian groups, to restart the Russell Fall mine in the Woronora region in New South Wales.
The Australian government has been the subject of several lawsuits and protests recently, in an attempt to deter its insistence on sticking to the use of fossil fuels at the expense of environmental issues.