Near coal-free energy by 2032? That’s what the energy operator expects

two wind turbines

With Aussies embracing the clean energy transition, the Australian Energy Market Operator (AEMO) is expecting coal closures to occur at three times the expected rate. This would see brown coal phased out by 2032, with black coal usage down a substantial amount. 

The new assumptions are made in AEMO’s ‘Step Change’ scenario, which assumes that 14GW of coal capacity will retire by 2030 as the generators are finding it increasingly difficult to compete against rooftop solar and large scale renewables.

As coal plants continue to age, they are also becoming more costly to maintain despite producing a reduced output due to the increased generation of renewables. 

The AEMO expects wind and solar to replace the generation currently handled by coal, although both will need to see a large rise in output for that to take place.

The AEMO Step Change scenario to 2050

The Step Change scenario highlights the immense pace of the clean energy transition in Australia, despite a slow start that left the nation behind much of the developed world. Importantly, the report will also serve as a guide that government, regulators and investors can refer to. 

The AEMO also produced an alternate scenario plan compatible with the 1.5-degree Paris climate goal, which would see all coal generators on Australia’s main grid closed by 2032, with wind, solar and a large amount of storage powering the majority of the grid. 

Interestingly, despite the AEMO expecting the early closure of coal plants in both of the presented scenarios, both the Coalition and Labor are predicting no early coal closures. This is despite the fact the Coalition assumes a 69% share of renewables by 2030, and Labor assumes an 82% renewables share in 2030. 

The AEMO Step Change scenario, which would see brown coal completely phased out by 2032, assumes a renewable share of 79% by 2030. 

To make sure the grid is ready to support the continued clean energy transition, the AEMO has proposed a 30-year ‘optimal development path’ which focuses on the 10,000 kilometres of new transmission that will be needed. The plan includes building links between renewable projects and main grids, some of which are already in progress.

The AEMO’s prediction of continued usage of renewable energy around the country follows the news that the world’s largest private renewable energy retailer will join the Australian market, allowing homes to take part in their ‘green-tailer’ offering that combines renewables, virtual power plants and an electric vehicle charging option.

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