Australian energy consumers will need to rely on coal-fired power for decades to come as the market transition to renewables, the Australian Energy Market Operator says.
The new report argues coal-fired power plants must remain open for decades to keep prices down.
Federal Energy Minister Josh Frydenberg said Tuesday the new report will please pro-coal MPs in the coalition.
“To support an orderly transition, ISP [integrated system plan] analysis demonstrates that, based on projected cost, the least-cost transition plan is to retain existing resources for as long as they can be economically relied on,” it said in the report to be released on Tuesday, according to media outlets.
The Turnbull government welcomed the report, with Mr Frydenberg saying it sends “a warning shot that coal needs to remain an important part of the energy mix if we want to keep our prices down and our stability up”.
But he ruled out direct government intervention to keep coal-fired plants open, or build new coal power stations, an option being advocated by a small group of coalition MPs including former prime minister Tony Abbott.
“I’m sure a lot of my colleagues will be pleased with what they’ve seen in this report, which says that coal will continue to be critical in the years ahead,” he told ABC radio.
“If they’re in the electorates in Queensland or in Victoria or in NSW where coal assets are currently in operation, they know that for those workers there will be a future.”
Mr Frydenberg, who will meet with his state and territory counterparts on August 10 to discuss the federal government’s planned National Energy Guarantee, said Australia had “turned a corner” on power prices.
“With the National Energy Guarantee we believe we’ll have more reliable energy system and we won’t repeat the sins of the past where we did see the premature closure of power stations and a massive increase in the wholesale price,” he said.
The federal government needs all of the state and territory governments on board if its National Energy Guarantee – which aims to lower power prices – can go ahead.
John Grimes, chief executive of the Smart Energy Council, said the future of small-scale solar was under a cloud and the government needed to reveal the future of the small-scale renewable energy scheme.
“The National Energy Guarantee is being turned into the national coal guarantee,” he said.
Meanwhile, a Newspoll conducted for The Australian has found voters believe the federal coalition is best placed to keep power prices lower and maintain reliable energy supply.
The Turnbull government is leading Labor 40 per cent to 34 per cent on the question of which party had the better approach to energy.