Coal plants are being retired faster than anticipated and Australia’s national energy market could operate without the fossil fuel by 2043.
This would produce $29 billion in net market benefits, the Australian Energy Market Operator forecasts.
It examined scenarios about Australia’s energy future and narrowed them down to the most likely nominated by industry stakeholders.
Under the “step change” scenario, 14 gigawatts of coal generation is likely to leave the market by 2030.
Plant closures are being announced or brought forward between two and three times faster than anticipated as renewables become cheaper.
As we prepare to share the Draft 2022 Integrated System Plan (ISP) next week, which was developed in close collaboration with stakeholders and industry, please find our factsheet to get up to speed on the ISP: https://t.co/wGiAHimFsO#EnergyFuture pic.twitter.com/l3ndnTlXxk
— AEMO (@AEMO_Energy) December 2, 2021
AEMO anticipates coal capacity is likely to close as early as 2040 and the national energy market will operate without it by 2043 under the scenario.
It would require a substantial increase in battery and pumped-hydro storage, hydrogen or gas-fired generation to deal with peak demand.
By 2050, heating and transport would be electrified and the global manufacturing of regular internal-combustion vehicles all but ceased.
Wind and solar generation is expected to be nine times greater and the installation of solar photovoltaic capacity is set to quadruple.
“This transformation will efficiently deliver secure, reliable and affordable electricity while substantially contributing to national emissions objectives,” AEMO chief executive Daniel Westerman said.
Thanks to everyone who has been involved in this work so far! https://t.co/QVuj1VMcAk
— Daniel Westerman (@dfwesterman) December 8, 2021
He expects it to deliver $29 billion in net market benefits and a 2.5 times return on investment value.
“It is essential that communities, governments and industry collaborate to meet the aspirations of consumers and the communities that will host new infrastructure,” Mr Westerman said.
AEMO’s final plan about how Australia’s energy future would look is expected in June.
The Morrison government has committed to net-zero emissions by 2050.
But it insists Australia’s coal industry will continue for decades.