The accelerating decline of coal-fired power is triggering an overhaul of Australia’s electricity market, with the Greens proposing a $40 billion renationalisation of the sector.
Key points:
- Greens policy would see Snowy Hydro become a not-for-profit, renewable-only producer and retailer
- The proposal would also eliminate coal and gas-fired power plants by 2030 and reverse a $600 million investment in a Hunter Valley gas plant.
- The Greens hope to hold the balance of power in the next legislature
Origin Energy announced on Thursday that it would close New South Wales’ largest coal-fired power station in 2025, seven years ahead of schedule, which followed AGL’s previous announcement that it was bringing forward the closure of two other coal-fired power stations.
The federal government is looking to the private sector for more investments in “distributable” energy, such as batteries, pumped hydro and gas to provide stability to the power grid when coal exits the system.
But the Greens have launched a bold policy to recast Snowy Hydro as a not-for-profit, renewables-only producer and retailer in the hope they hold the balance of power in the next parliament.
“Our refitted Snowy Hydro would build 25 gigawatts of new renewables and storage, which is about the same as what the coal fleet is producing now,” Greens leader Adam Bandt told the ABC.
The Greens’ plan would also see:
- All coal and gas power plants will be closed by 2030
- Snowy Hydro sells electricity at cost to consumers
- A cancellation of the federal government’s $600 million investment in the Kurri Kurri gas-fired power plant in the Hunter Valley
The Parliamentary Budget Office estimates that it would cost the Commonwealth $40 billion to build the electricity, transmission and storage facilities needed for the Greens’ proposal.
Small chance that the plan will become reality
The Greens’ proposal would effectively renationalize the electricity system, eliminating energy retailers and some generators from the market.
There is no appetite from the main parties to adopt a takeover of the national electricity market.
But the small party hopes to have some weight after the next federal election, if it manages to ensure the balance of powers in the Senate, or to share the balance of powers in the House of Representatives.
“It’s the kind of idea that could pass in the next parliament,” Bandt said.
“We are seeing that with coal-fired power plants shutting down as big companies decide they are unprofitable, workers and communities are being left behind,” Bandt said.
“It is therefore time for the government to intervene [up].”
Federal Energy and Emissions Reduction Minister Angus Taylor is counting on energy companies to fill the gaps created in supply and stability.
“Our preference has always been for the private sector to make these investments,” he said, while highlighting the Coalition’s direct interventions in the energy market, such as financing the Snowy 2.0 hydroelectric project and Kurri Kurri gas-fired power station. .
“We’re investing in a whole range of technologies. We’re investing in gas, we’re investing in pumped hydro, we’re investing in batteries. All of these dispatchable generation sources are important.”
Coalition uses Greens climate ambition to campaign against Labor
The Coalition has repeatedly highlighted the prospect of the Greens forcing Labor to adopt more progressive policies on climate change as it campaigns for votes in coal and resource industries electorates.
The Labor Party is proposing to spend $20 billion on its “rewiring the nation” policy, which would improve electricity infrastructure to accommodate new sources of power and batteries brought online.
But where Labor sees a role for gas as the electricity system shifts from coal to renewable resources, the Greens want coal and gas-fired power phased out by the end of the decade.
The Greens point to the success of the ACT reaching 100% renewable energy as evidence of the viability of their plan, although the ACT’s target was achieved using a very different approach, involving feed-in tariffs at large scale and reverse auctions.
ACT Energy and Emissions Reduction Minister Shane Rattenbury, a Greens MP, backed the Federal Greens’ plan, fearing the national grid could be at the mercy of energy companies’ bottom lines.
« Hazel [power station in Victoria, which closed in 2017] is the first classic example of that, where they just made the decision that it wasn’t worth the investment anymore,” he said.
“They [energy company Engie] shut it down and we’ve seen two years of electricity prices skyrocket because of this single decision by this private company about its bottom line.”
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