The report by the Institute for Energy Economics and Financial Analysis (IEEFA) and Green Energy Markets says that against the background of the boom in renewables, at least one coal-fired station may close. And a rapid energy transition could lead to a sharp reduction in output of energy from existing generators.
The most vulnerable coal stations are in New South Wales (NSW) state. Liddle station is due to close in 2023, but analysts say at least one more station could be shut down in the state over the next five years.
“The market is facing a tidal wave of new supply, much greater than anything government authorities or market analysts forecast or even contemplated just two years ago,” says Tristan Edis, Director of Green Energy Markets.
“The supply added from 2018 to 2025 equates to over a third of the entire demand in the NEM (National Electricity Market), and more than 8 times the annual generation of the Liddell coal-fired power station in NSW.”
From 2018 to 2025, new wind and solar plants will add 70,000 gigawatt hours (GWh) of extra supply.
Co-author Johanna Bowyer of the IEEFA said that could lead to the collapse of many fossil fuel generating stations.
“They will be displaced because wind and solar have no fuel cost and typically bid into the market with prices close to zero,” Bowyer said.
“We predict that gas power station output will fall by 78% and coal output by 28% by 2025 compared to 2018 levels.”
New capacity for renewables will lower electricity costs, but could cause greater instability of supply, the report said.
Experts have called on the government not to build new coal-fired stations, but rather to switch them over to new sources to balance renewables. In the short run, this could be done with gas and over a longer perspective, by introducing different battery projects.
