OPINION: Regulators, politicians and industry players are debating how best to build and pay for a system that no longer uses coal-fired power. The short answer is that consumers’ bills are only headed in one direction.
about the eagerness of the private sector to invest far more in transmission and renewables, the hurdles to doing so quickly haven’t been eliminated by a new federal government declaring a political truce with the states.The transition of the energy market also requires the difficult balancing act of keeping enough coal-fired and gas-fired power in the grid until there’s sufficient investment in renewables, transmission and storage capacity to replace them.
AEMO’s chief executive Daniel Westerman describes the amount of investment required as “staggering”. At the moment, for example, coal still accounts for around 60 per cent of generation in the national electricity market despite its decline being both rapid and irreversible.According to the vote by various industry and consumer groups as part of AEMO’s lengthy consultation process, renewables are expected to account for 83 per cent of generation by the start of the 2030s.
The general view is the proposed development of a “capacity market” – to effectively pay generators to have firming power available as needed – might include gas as well as pumped hydro and batteries. But coal is still likely to be excluded, given political and environmental sensitivities. The five big projects the regulator cites as most urgent to progress are the Hume Link connecting Snowy Hydro, the VNI West interconnector between NSW and Victoria, the Marinus Link connecting Tasmania to Victoria, expanded transmission to the renewable energy zone in northern NSW and a boost to the greater Sydney transmission ring.
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