A capacity mechanism could prevent more energy crunches as seen in Australia, but executives are split on whether coal should be included.
, industry CEOs say, but they are divided on whether coal generation should be included.
Several of Australia’s largest coal-powered generators are scheduled to run at reduced capacity throughout much of winter, straining the country’s energy market. The Energy Security Board last year proposed the capacity mechanism as part of its proposed post-2025 redesign of the National Electricity Market, but several state governments have voiced opposition to the plan.
The capacity mechanism is described as technology-neutral, but it could prop up the economics of coal power plants in the future depending on its design. Coal is being supported by surging wholesale electricity prices, but a flood of new renewable generation could again lead to lower prices that would see the fossil fuel struggle to compete with renewables.
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