Power April 2022 Intl - 6

Australia's Coal Conundrum:
Economy, Climate at Odds
Coal has long been a lifeblood for Australia.
The country is the world's largest
exporter of metallurgical coal used to
make steel, and it's the second-largest
exporter of coal for use in power generation,
supplying much of Asia. Government
data shows the coal industry
directly and indirectly supports more
than 150,000 jobs, and in recent years
has contributed more than $60 billion
in economic impact annually. Coal-fired
generation accounts for as much as
60% of the country's electricity, even
as renewable energy's share of electricity
output continues to grow (topping
30% last year), with renewables
far outpacing both gas-fired generation
and hydropower.
The coal industry faces headwinds,
though, as Australia joins much of the
rest of the world in developing decarbonization
strategies to hit climate targets-
in Australia's case, a goal of net-zero
emissions by 2050. The public debate
about climate change has grown louder
after major wildfires in Australia in 2019
and 2020. Prime Minister Scott Morrison's
government has been criticized
for moving too slowly to close coal-fired
power plants and build more solar and
wind farms; current leadership has said
they want to be cautious with that transition
in order to mitigate an energy crisis
in the country that has led to blackouts in
recent years.
" There is tremendous public pressure
on the coal plant operators to close
plants, " said Andrew Waite, director,
Sales & Business Development, Southeast
Asia for Babcock & Wilcox. " This
pressure is coupled with a market that's
quickly changing with the rapid rise of
cheaper renewable energy, which is expected
to be greater than 60% of grid
generation by 2030. The market reality
of this rapid rise in renewables and storage
is the economics of coal-fired power
plants are under significant pressure by
these cheaper renewables. "
Waite told POWER, " The drivers for
the transition from coal to other fuels
for power generation, including renewables
like solar, wind, and hydro, depend
on the market. In September 2016,
South Australia experienced a blackout
as a result of storms and high temperatures.
Due to recent coal plant closures
6
1. Origin Energy in February said it would close the 2,800-MW Eraring coal-fired power plant
in 2025, seven years ahead of its previously scheduled retirement. Courtesy: Commonwealth
Scientific and Industrial Research Organization
at the time and lack of energy storage
for renewables, the blackout was more
widespread and longer in duration than
previously experienced and power could
not be restored for most of the day.
Since then, additional coal plant closures
have become politically unpalatable. "
A buildout of cleaner energy options is
slowed by the economic impact of moving
away from coal, the recency of the
2016 blackout, and more power outages
in the past few years. Though no new
coal-fired power plants are expected
to be built, the Queensland Resources
Council has said several new coking coal
mines will open over the next five years.
Steel industry experts have said the
promise of " green " steel remains years
away; some have said at least 40% of
the steel produced in 2050 could still be
made by burning coking coal, in a steelmaking
process that today accounts for
about 8% of all carbon dioxide emissions
worldwide. Officials have said that mixing
biomass with coking coal would help
reduce emissions, as researchers continue
to look for cleaner technologies.
" Many electricity markets across the
world are undergoing a paradigm shift
in how they operate, as penetrations
of low-cost renewable generation increase, "
said Lara Panjkov, senior manager,
Market Development and Growth at
Fluence. Panjkov told POWER, " Australia
has plenty of wind and sun at its disposal
so it can provide consumers with
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ultra-low-cost electricity when these are
available. At times when they are not,
fast-responding, flexible resources can
balance out the grid. "
Panjkov said Fluence is providing a
150-MW/150-MWh energy storage system
" to support the transition to renewable
energy at the site of the former
[1,600-MW] Hazelwood Power Station in
the Latrobe Valley, Victoria. There is still
lots of work to do for regulators, governments,
and industry to ensure that we
have enough flexible resources like energy
storage to prepare for imminent coal
plant retirements. We have the opportunity
to make the most of a technology
we already have today to transform the
way we power Australia. "
The Australian Energy Market Operator
(AEMO) forecasts Australia's power
demand will nearly double by 2050, in
large part due to electrification of transportation,
with gasoline and diesel-powered
vehicles giving way to electric cars,
trucks, and buses. AEMO has said Australia's
current pipeline of power generation
and energy storage projects totals
138 GW, more than double the country's
current generation capacity of 59 GW.
The agency said renewable energy installations
account for 86% of the proposed
new projects.
AEMO expects more than half the
country's coal-fired power generation
capacity to close by the end of this decade,
and also said it's possible all coalPOWER
| April 2022
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Power April 2022 Intl

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