Coal's rapid decline won't cripple future energy grid: Australian study

What a laugh!  This is just a call to replace coal with natural gas  The Greenies won't be happy at all.  Natural gas is also a "fossil" fuel that gives off CO2!

Natural gas does tend to be cheaper than coal but that is subject to supply and demand.  On the East coast at the moment only Queensland mines it and their producers have long-term contracts with overseas customers. 

It would certainly be cheap if NSW and Victoria relaxed their bans on gas mining but that seems a long way off.  An unholy alliance between Greenies, Nimbys and farmers is standing in the way so far


Coal’s rapid exit from the energy grid can run smoothly and governments won’t need to intervene in the market to keep the lights on.

The future energy market can serve consumers well without big government subsidies despite the unprecedented disruption in the shift to renewables, said Energy Security Board (ESB) chair Dr Kerry Schott. The ESB is proposing a range of market reforms in a new study released for consultation on Monday.

Established by the Commonwealth of Australian Governments (COAG) Energy Council in 2017 the ESB advises on the unprecedented market transition so it can deliver “security and reliability to drive better outcomes for consumers” in the national electricity market.

“Governments are pretty nervous about big coal plants exiting the grid, and old gas plants for that matter, and I can understand why they want to intervene,” Dr Schott said.

“But if we can get the market measures in place outlined in the report, governments may not need to intervene at all. But comprehensive change to the market design is needed “

The ESB’s Post 2025 Energy market design report found “the exit of generation is not in itself a problem” if forward-looking reforms are made.

It’s seeking feedback on a suite of policy proposals to manage prices and encourage private investment in not just large scale power generation but also firm dispatchable resources like hydro power, batteries and fast-start gas plants for when the sun isn’t shining or wind isn’t blowing.

Over the next 20 years 61 per cent of Australia’s ageing and increasingly expensive coal fired capacity is set to be shut down and mainly replaced by cheaper renewable energy with dispatchable back-up that can enter the grid as required at short notice.

The national energy market in the past year comprised 74 per cent coal, six per cent gas, 4 per cent solar, 10 per cent wind and 5 per cent hydro. This is changing rapidly.

The ESB noted governments have reacted to the volatility in consumer electricity prices with a wide range of uncoordinated policies that “do not align with incentives to encourage investment in the amount and type of resources that would meet consumer and power system needs”.

“What we’re trying to do with our reform options is to have a market for the essential services that firm and dispatchable power provides. We want companies bidding those services into a market that is properly valued so the Australian Energy Market Operator can stop intervening to ensure those services are available - which is currently very expensive,” Dr Schott said.

The ESB also emphasised the need for new market rules to harness the benefits of what’s known as the distributed energy resources - that is the two million households and business with rooftop solar panels that can feed power back into the grid, and store power in batteries.

The CSIRO has found a two-sided energy market, where households pay for using power supplied from the grid and are also paid for the power generated on their premises and demand savings they make, could earn up to $2.5 billion a year, or an annual electricity saving of $414 to an average household.

SOURCE