Market Operator Predicts Closure of Australian Coal-Fired Power Plants within 15 Years
The AEMO predicted that 90 percent of the coal-fired power plants in the National Electricity Market would retire before 2035. Australia will close down all coal-fired power stations by 2038 at the latest, with an even faster transition to be expected in the next decade. The Australian Energy Market Operator (AEMO) released a 2024 draft roadmap (pdf) that provides an overview of Australia’s energy transition for the next 20 years and beyond. Under a scenario that is most likely to happen, the AEMO predicted that 90 percent of the coal-fired power plants in the National Electricity Market, which covers most Australian states and territories except for Western Australia and the Northern Territory, would retire before 2035. By 2038, the entire coal fleet will cease to operate, which is five years earlier than what was forecasted in the 2022 roadmap.
The AEMO also said the complete phase-out of coal-fired power stations might occur even earlier than the 2038 timeline, as energy producers found it increasingly less attractive to hold onto those assets amid the wider push towards net zero. “Ownership has become less attractive, with higher operating costs, reduced fuel security, high maintenance costs, and greater competition from renewable energy in the wholesale market,” the roadmap said.
Meanwhile, Climate Change and Energy Minister Chris Bowen said the AEMO’s roadmap showed that renewables were a firmed path for a “cleaner, cheaper, more reliable grid.” “Today’s updated draft energy plan from AEMO reiterates what we already know: firmed renewable energy is not just clean, it’s the cheapest way to ensure a reliable grid,” he said in a statement.
“After ten years of neglect, the task to build our modern grid that supports households and businesses with reliable energy as aging coal exits and solar surges is as urgent as ever.” Billions in Investment Needed
The market operator anticipated that household and business electricity consumption would nearly double from the current 174 terawatts an hour, to 313 terawatts hour by 2050.
It believed the lowest-cost pathway for secure and reliable electricity was from renewable sources that were supported by batteries and pumped hydro, as well as firmed up by gas-powered generation.
