AEMO: We must shut 10 Liddells

Via the AFR:

Coal-fired generation equal to 10 Liddell power stations will have to be closed by 2036 for Australia to meet its Paris climate agreement pledge, the Australian Energy Market Operator says.

AEMO’s network development plan released last December said that for Australia to meet the pledge the Turnbull government made at the Paris climate talks in December 2015, 15.5 gigawatts of coal-fired generation would have to close between now and 2036.

That is equal to more than 10 times the effective output of Liddell, a 45-year-old power station in the Hunter Valley in NSW that AGL Energy, its owner, wants to close in 2022 in order to build more flexible wind, solar, gas peaking and demand response capacity.

The government pledged at Paris to reduce Australia’s carbon dioxide emissions by 28 per cent from 2005 levels by 2030, to review the targets every five years and to work towards zero net carbon emissions – the level scientists say is needed from rich countries to limit temperature increases to 2 degree Celsius – by 2050.

…A more aggressive scenario – such as Labor’s 45 per cent emissions reduction target – or slower than expected growth in electricity demand would require an additional 3.3 GW of coal capacity or two or three Liddells to be shuttered.

And John Hewson:

Finkel went to great lengths to recognise the political reality of the government’s objections to the best and second best, responses – namely, an emissions trading scheme and an emissions intensity scheme – proposing a technology neutral clean energy target (CET) to provide a clear direction and certainty for the essential transition to reach our Paris commitments by 2030. While this clearly contemplated the necessary further movement to renewables as a source of power, it still admitted a sizeable reliance on coal-fired power by that date.

It is worth pointing out that a true “conservative” response would be a purely market-based emissions trading scheme, using a market-determined carbon price to ensure the most cost-effective transition.

The suggestion that we may now need a new, supercritical, coal-fired power plant to fill a capacity gap left by the closure of Liddell is, quite frankly, farcical. When the private sector says they will not build or finance it, it is simply just a sop to the National party to even raise it as a possibility. But then, of course, in our “new conservatism” we don’t respect what markets are telling us, do we?

This “gap” would be easily filled by a combination of base-load solar thermal projects, batteries and some better demand management well before 2022. Having set the regulatory direction of the “market” with a CET, the government should stand back and let the technologies compete to deliver the most cost-effective and sustainable outcome.

It is also worth recognising that a new coal-fired power plant, if it could be built, may simply accelerate the closures of other older, less efficient, plants, so not actually closing the perceived “gap”.

Turnbull needs to rise well above this mire and deliver the leadership he promised on assuming the prime ministership. If he does, I believe the electorate would cut him a lot of slack. However, to continue as he is, he will surely lose the next election. It will be his failure to address the rising costs of power, housing, childcare and school fees, and other key elements of the cost of living, that will be decisive with voters.

Turnbull will lose. Bring it on.


  1. government leaders have said all coal generation needs to be retired by 2025, Drax is moving forward with plans to convert its last three coal-fired units at the 3,960-MW power station near Selby in North Yorkshire to natural gas and biomass.

    Government announced in 2015 that all coal-fired power stations would be closed by 2025

    The company, which also operates in the US, wants to install 3.6 gigawatts of gas-fired power capacity, replacing up to two of its coal-burning turbines near the town of Selby in North Yorkshire.

  2. jeez Hewson is clear eyed on this

    I love his articulation of the unseen effects of a new Higher Efficiency lower emissions dirty coal power station ie. closing the other ones, thus causing a bigger gap

    He’s right but, turnbull is toast

    lotta votes in the electorate on this
    lotta votes
    tremendous number of votes
    lotta folks love solar and batteries and clean air and water and a healthy planet
    lotta folks
    great folks

    • Unfortunately people do not give a damn about a healthy planet. I comment under articles on clean energy websites and even treehuggers disagree with my idea of fining people for throwing aluminium cans in the rubbish bin. Some treehuggers agree with me on that one though.

      The only reason why Californians support a big renewable energy target is because Hollywood has a lot of smog. No smog in Australia, so bogans say “global warming?, mate, it got so cold in Melbourne this winter! Burn moar coal!”

      On RenewEconomy, one can barely say that solar panel jobs should not go to 457 visa staff! It is almost regarded as “racist” to be against 457 visas on that website!

      • That’s because a fine type system is impractical to implement. A deposit and refund scheme is a much more effective way of ensuring containers are sorted efficiently. I’ve lived in places with these schemes and the bums make sure that the bottles and cans don’t end up in landfill. Gives them an income stream and boosts recycling numbers.

    • I think you’re wrong.

      Look how indebted most households are. Look how big mortgages are. Look how many families struggle and juggle just to make ends meet. Look how pensioners worry about using energy winter or summer, afraid of big bills.

      We read here at Macrobusiness of these travails almost daily: inequality rising, wages slowing, threats of impending house price falls, economic fragility, curbed consumer spending.

      If push comes to shove, voters will go with the hip pocket, as they near always do. This is a huge opportunity for the Government to harness. One hot summer in the next year or two, power failures, it’ll be the final straw. Labor can’t win this one except in some inner urban seats where it competes with the Greens.

      • The only people who will burn votes as a result of this incompetent mess are the people in government, aka, the people who are responsible for it. Bias has muddled your logic to the point of nonsense.

        As a concession, I can agree with your preceding paragraphs; though they are also election losing issues that the coalition have fostered.

      • Hadron Collision: I saying that most voters will opt affordable reliable electricity ahead of expensive intermittent electricity.

        Brenton: I blame all Governments of the last several years, State and Federal. They’ve made this mess. They need to fix it. Unfortunately the debate has degenerated into who was more responsible (tacit acknowledgement that they both were) and point scoring off that. Labor has studiously avoided saying too much about the Paris “obligations” because they know it’s nearly dead and Liberals have studiously avoided Howard’s introduction of energy targets and Turnbull’s crossing the floor on the ets.

        All voters want is affordable reliable electicity. Not more ego grandstanding.

      • rhymes with truck

        when did MB start applying a bad language filter on posts ? HnH has always been proud of their ultra-liberal (in the true sense of the word) attitude to policing the forums.

      • Have had a few of mine flagged for moderation recently. All have been greenlit thus far, so looks like the ultra-liberal pride lives on. Wonder if it is someone going aggro on reporting ‘offensive’ posts?

        Edit: scratch that, can’t even report posts.

    • Yeah I got one of those yesterday for pointing out the obvious about Australian impact on global emissions via our coal fired power stations and the abundant raw materials this land has vs. the ridiculously high energy costs…with no cussing…but still computer says…no post for you !!

  3. Turnbull is trapped by his party room which he must represent or lose the leadership.
    His political capital with middle Australia is slowly being eroded, his party’s political capital is already looking very vulnerable.
    But don’t underestimate the research that the Libs will be doing to identify the various groups/identities they must gain in the marginal seats to hold government.
    Why anyone respects Turnbull after the dud NBN for which he was responsible I have no idea.

  4. “This “gap” would be easily filled by a combination of base-load solar thermal projects, batteries and some better demand management well before 2022.”
    OK So if the thermal projects are so competitive/cheap why aren’t they smashing everything out of the park?
    Batteries? Is there a single piece of realistic evidence that batteries will ever be able to provide widespread power on an industrial basis? None! According to MB Musk had ALL the problems in SA solved with his damned battery – about the same effect as me peeing in the Pacific)Fairy godmother arguments should be left out of this. There is too much of visualizing an ideal world and then pretending it is going to be so just because we can think it up.

    ” Having set the regulatory direction of the “market” with a CET, the government should stand back and let the technologies compete to deliver the most cost-effective and sustainable outcome.”
    So we’ll stop subsidising wind farms?

    Gas – by all means. That will be a bloody new policy for ALL the damned labor governments across Aus (forgive my bitterness – it was Labor that put the damned Kybosh on Gas generation proposals way back!! Gotta love the way this is all Malcolm’s fault as a result of the last 12 months!!) ) But if gas still has to INCREASINGLY (every year) subsidise the hell out of windfarms and solar how can it EVER provide base load power at a reasonable/cheap price? Add in the fact you can only fire it up when power isn’t available from the subsidized windfarms and solar – how is that going to work?

    I wonder if Australians are going to think we are a rich country if MB’s prognostications were to come true and the housing market did happen to go pear shaped or we got hit (somehow despite 2.4TRILLION of printing by the major CB’s) with a foreign funding crisis.

    • Tell me, has Coal ever received any form of subsidy.
      MOreover, does it still receive subsidies

      Subsidised federal funding (like for new coal terminals)
      Or mining diesel fuel subsidies
      Or tax concessions
      Do they infact pay the true cost for the socialisation of the downside (by this I mean, are they paying the true cost for the pollution)
      Have they ever/do they receive taxpayer funded bailouts for environment remediation or catastrophe management

      Aping on about solar/wind subsidies seems like a little bit of disingeneous shrill footstamping innit

    • Flawse, all this stuff has been debunked so many times it beggars belief.
      Coal is done. Not just here, but everywhere. It will go the way of the horse and cart.

  5. We must shut 10 Liddells … OR, we could give up on the population ponzi and start trying to build a society that works properly.

  6. The rest of the world are, between them, building 1500 new coal fired power plants (and a lot more when Africa gets some cash). I assume our political masters will be working hard on legislation to prevent the resulting CO2 getting to Australia. As we know, over here, if we have a problem, we create bucket loads of legislation (duplicated at Federal, Local & State levels of course) which we just know will fix it.

    But, realistically, as we all lose the final struggle to breath through a hot CO2 smog and the last cabbage in the garden wilts & dies, we will be proud to know that, notwithstanding our colossal (and unreliable) energy prices, we were able to substantially reduce the overwhelming 1.8% of the smog we were responsible for.