QLD & NSW could see early coal retirements

Victoria and South Australia are leading Australia’s transition to renewables, with renewable energy capacity at 33%, almost twice that of Queensland and New South Wales at 16% capacity, however new research shows the northern states are ramping up new renewables.

The Australia Institute Climate & Energy Program’s latest National Energy Emissions Audit reveals New South Wales and Queensland are using less of their existing coal fired power stations which could lead to earlier retirements than what is currently planned.

Key Points:

  • NSW & Queensland are increasing renewable uptake through Renewable Energy Zones and CleanCo (respectively) and reducing the usage of coal fired power stations
    • The average coal generation capacity in NSW has fallen below 60% and if it continues to drop at that rate it may hit 50% by April 2022, a challenging financial threshold for aging coal plants.
    • The average coal capacity factor in QLD is about 69% however, it has been falling longer and faster than NSW.
  • In Victoria and South Australia coal-fired energy generation has fallen from 72% to 53% since 2016, while total renewable share has grown to just under 33%.
  • In NSW & Queensland, the transition from coal to renewables has progressed only half as far as southern states, with total renewable share reaching just 16%.
  • The annual emissions intensity over 2019-20 of the NEM has decreased by more than 25% below the historic maximum (in 2008).
    • Almost two-thirds of the total reduction in emissions intensity is due to the changing mix of generation, away from coal and towards wind and solar. 

“Aging coal power stations like Liddell will find it increasingly difficult to stay afloat if they are only being used half the time, and that is the direction we appear to be heading in NSW in the next two years,” said Dr Hugh Saddler, author of The Australia Institute’s National Energy Emissions Audit.

“To avoid a surge in electricity prices, like what followed the closure of Hazelwood power station, coal plant closures should be timed with investments in new renewable generation capacity, together with investments in appropriate types of storage, transmission, and other technologies. The Energy Security Board is considering the matter but there is still a gap when it comes to national leadership.”

“In the renewable energy contest in the National Electricity Market the AFL states of Victoria and SA have leapt ahead of the NRL states of QLD and NSW, but the game isn’t over yet,” said Richie Merzian, Climate & Energy Program Director at The Australia Institute.

“It is worrying the Federal-NSW Liddell Taskforce is still trying to find some way to put Liddell on life support beyond its 2023 retirement, when our research is showing it could retire much sooner than that as the market relies less and less on coal power.”

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