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Killing Queensland coal?

By Geoff Carmody - posted Monday, 13 November 2017


The Palaszczuk 2030 RET requires a roughly ten-fold increase in the share of renewables in the next twelve years.

If this is 100% at the expense of coal, that more than halves coal's power generation share by 2030 (down to about 35%). At around today's generation levels, that implies an average cut in coal generation supply across all eight existing coal generators of about 56%. Alternatively, if the cut comes via closures, assuming the oldest plants go first, that could halve Queensland black coal generators, with Gladstone, Tarong, Tarong North and Callide B closing by 2030.

If coal power stays in business at all, Queensland coal prices still could as much as double. Total electricity prices would rise. How would the energy market in Queensland (and the NEM) respond to that outcome? Not well, I think.

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If Queensland coal prices as much as double in twelve years, any remaining coal power could shut down as well. The main question might be the order of closure. Which would come first? Presumably the oldest (Gladstone)?

Will a 50% RET become an unreliable, expensive, fossil fuel killer? If so, whither Queensland?

Will a 50% RET in Queensland kill off coal power in that State?

Isn't it really, on average, a 100%(+?) RET during the day?

The time 'crowding-out' blade of the RET scissors – not advertised by proponents – could force coal costs uncompetitively high, while renewables are given a strongly subsidised ride.

Prospects for Queensland coal power look dire.

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Worse, all existing renewables targets (the 100% 2020 ACT target aside) are sold by sponsoring governments as transition goals on the way to even lower emissions. 100% reliance on renewables 24/7 is the obvious end-point.

If this outcome is imposed through policy, regardless of the economics, the consequences will be even more adverse:

  • Energy costs will increase further, and substantially.
  • Grid stability will be compromised or require costly extra investment to correct.
  • Investment in multiplied generation and storage will be needed to offset intermittency and low energy density.
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My apologies. In my previous opinion piece (Are renewables and batteries part of the power generation & storage solution?) on 9 November 2017, I promised a piece on 'poles and wires': the electricity transmission and distribution network. I hope to write that piece next time.



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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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