NSW Must Avoid ‘Poorly Planned’ Coal Closures: Committee

Australia's coal mine and power station workers may soon be left jobless as the nation transitions away from coal. Fuyu Liu/Shutterstock

A New South Wales (NSW) committee has urged the government to swiftly address key factors hampering the state’s safe shift from coal to renewable energy generation.

The report (pdf) by the Committee on Environment and Planning listed 21 total recommendations to aid in the transition, including offering help to communities heavily dependent on coal.

“The lack of forward planning and economic diversification in coal dependent communities from state and federal governments has delayed energy transition,” said committee chair Alex Greenwich.

As of December 31, 2020, almost 21,000 Australians had been employed at NSW’s 38 operating coal mines, and in 2020 the state’s coal exports exceeded $18 billion—or 40 percent of the nation’s total exports.

The report outlined the importance of a “just transition”—the ability to pivot away from coal carefully, exemplified by Germany’s Ruhr Valley, which Greenwich highlighted as being considered the “gold standard” for coal mining and power generation closures.

The committee recommended the NSW government invest in programs capable of reskilling the existing coal workforce and providing education and training for an emerging renewables sector.

Greenwich warned that, without such government intervention, the outcome could turn out similar to that of the United States’ Appalachian area—which, after rapid closure of coal infrastructure, saw the livelihoods of entire communities severed, leaving the region riddled with intergenerational poverty and social dysfunction.

And in Australia, the 2017 exit of the Hazelwood coal plant cut jobs for over a thousand Victorians, with one report finding the loss of incomes forced businesses to close and causing the region’s output to fall by $1.58 billion.

Workers leave Hazelwood Power Station after their final shift in Hazelwood, Australia, on Mar. 31, 2017. Around 750 workers have been left jobless after the plant was closed. Scott Barbour/Getty Images

Hazelwood’s shutdown also gave rise to another issue, as the loss of 1,600 MW (megawatts) of power—which had supplied 25 percent of Victoria’s electricity needs and around 8 percent of the entire National Electricity Market—had sent energy prices soaring across Australia’s east coast.

Specifically, average electricity prices shot up by 85 percent in Victoria, 63 percent for NSW, 53 percent for Queensland, and 32 percent for South Australia—causing concern as all but one of NSW’s ageing coal plants will retire within the next 15 years.

To address energy supply and affordability concerns, the report pushed for renewable energy zones (REZs)—zones that promise to supply cheaper electricity with energy generation, storage, and additional infrastructure in close proximity.

The committee heralded NSW’s recent landmark $380 million commitment to develop five new REZs, but disagreed with the federal government’s plan to utilise gas power to back intermittent wind and solar generation.

Instead, the report suggested that the NSW government should prioritise battery technology as the key in supporting wind and solar during periods of minimal output.

An aerial view of the Darling Downs solar farm near Dalby, Queensland, Australia, in this undated photo. AAP Image/APA

However, the recommendations did not address several significant concerns raised by experts regarding Australia’s energy security future, including maintaining the electrical grid’s “frequency.”

The Australian government’s Energy Security Board warned the prime minister and state leaders last week that Australia’s grid needed a major revamp to handle an accelerated proliferation in solar and wind generation.

The board’s sentiment has been backed by an expert in electrical grid systems and University of Melbourne Engineering Professor Iven Mareels, who outlined the need to ensure sufficient energy supply amid a transition to more intermittent power generation.

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Mareels explained the critical importance of maintaining grid frequency through “inertia,” typically only possible by large spinning generators used in coal, gas, and hydropower stations.

Mareels also believes that batteries are unsuitable for providing backup generation for the grid as they typically output for very short periods of time. Instead, Mareels suggested that pumped hydropower offered a more economical and practical solution.

For example, the Australian government’s Snowy 2.0 carries a 25 times larger price tag than South Australia’s newest big battery but will have a storage capacity of 1,400 times larger.

Lastly, Mareels said that the intermittency of solar and wind meant more solar panels—also known as photovoltaics (PV)—and wind turbines had to be installed to compete with similar levels of fossil fuel generation.

“A gigawatt of PV is not a gigawatt of coal-fired power,” Mareels previously told The Epoch Times.

Mareels explained that the fundamental reason behind this was solar and wind output depended heavily on weather conditions and the time of day.

As a result, generous estimates place the expected output for these intermittent forms of power at 25 percent of its maximum capacity—with actual figures closer to 16 percent, Mareels said.

Thus, Mareels said that four times as much solar and wind power would be needed to replace the equivalent amount of coal generation.

“People have to realise the grid now is about 40 gigawatts of power. In order to do this with renewables, we probably have to build something that is four times bigger—we probably have to build something like 160 [gigawatts].”