Photo credit: Windlab

29 November 2018

Written by Dr Lachlan Blackhall, Entrepreneurial Fellow and Head, Battery Storage and Grid Integration Program, the Australian National University, this article originally appeared in the Sydney Morning Herald.

While one end of Australia’s political spectrum ramps up plans to underwrite new coal fired power stations, there is now have a competing policy agenda that positions renewable energy and battery storage as key pillars of Australia’s energy system.

As the inevitable debates between the major political parties over the best path forward gets underway, a simple and clear fact cuts through all the rhetoric: Australia doesn’t need coal as part of its energy future.

Crucial planning about Australia’s energy and climate future is currently held hostage to ideological and political agenda, but there is a clear path ahead that will deliver energy reliability and security, reduce emissions, and address the rising costs of electricity for customers and communities everywhere.

That path is underpinned by renewable energy and energy and battery storage.

For the last 70 years, coal fired generation has played a central role in Australia’s energy landscape. However, as renewable generation costs plummet and energy and battery storage become more readily available, we must recognise that we need never build another coal fired power plant.

When you talk about replacing coal, some people assume you must ‘hate’ coal. But I don’t hate coal at all. Rather than having any personal vendetta against coal, my point is very simple: coal is no longer fit for purpose. It is simply not the cheapest, nor the cleanest, nor the most flexible form of generation.

Crucially, there is already a plan in place that demonstrates how we can do it cheaper, cleaner and better with renewables and energy storage. The Australian Energy Market Operator (AEMO) has clearly said in its recent Integrated System Plan that there is no need to extend the lifetime of existing coal fired power stations beyond their scheduled retirement dates.

The plan also clearly states that we will never build another coal fired power station in Australia. AEMO note that the cheapest way to replace the energy currently produced by coal is projected to be an efficient combination that includes renewable generation (largely solar and wind) and energy storage.

So what about all this talk about baseload power and dispatchable generation?

Baseload power is a meaningless criterion for modern energy systems, because it refers to an increasingly outdated mechanism used to prevent coal fired power stations from having to turn off at night.

In reality, to run an electricity grid, you need to make sure you have both energy reliability and energy security. Energy reliability means that there is enough supply to meet demand, while energy security means that the electricity grid stays online even if there are disruptions such as a major generator or power line outage due to a fault.

On both of these counts, renewables and energy storage can get the job done. The geographic diversity of wind and solar installations around the country contributes to a reliable energy supply, while energy and battery storage is used to ‘fill in the gaps’ of renewable generation when it is needed.

Indeed, AEMO has already stated that there are no forecast breaches of reliability over the next 10 years. Importantly, this is true even taking into account the upcoming closures of the Liddell coal-fired power plant in 2022.

Another favourite buzzword of this debate, ‘dispatchable generation’, simply means that you can obtain energy exactly when you need it.

Conveniently, energy and battery storage is perfectly capable of responding nearly instantaneously to deliver energy on-demand to support both energy reliability and energy security.

For instance, AEMO recently issued a report about the operation of the Tesla battery in South Australia, which notes that the battery is both “rapid and precise” when it comes to supporting energy security, compared to coal-fired generation. In simple terms, battery storage can out-perform coal in providing energy security services to our electricity grid.

Renewables and storage may be able to provide energy reliability and security, but what about energy prices?

When it comes to cheaper electricity prices for consumers, energy generation is only part of the story. This has been made very clear in the recent Australian Competition and Consumer Commission report into electricity prices, in which the ACCC makes over 50 recommendations about how to reduce electricity prices for consumers.

The recommendations, which include boosting competition in generation and retail markets and improving consumer experiences and outcomes, suggest that over the next four years alone, customers could see price reductions of over 20 per cent. At no point in these recommendations do they suggest any role for coal fired generation.

As we head into another federal election cycle, we’ll undoubtedly have more ideological and political rhetoric-fuelled debates; but what the community really needs is for government and industry to get on with building Australia’s future energy system.

The energy transition is inevitable, but Australia has the opportunity to lead the world through it, creating jobs and exporting technology and know-how to the rest of the world.

All we need to usher in these benefits and opportunities is simply to realise that coal has had its day and we can do it cheaper, cleaner and better with renewables and energy storage.