Australia's Renewable Energy Boom May Cause Dispatchable Power Shortage

Analysis indicated that with the emergence of a renewable energy boom, in order to achieve the Australian government renewable energy target, by 2025, Australian coal-fired power plants will face increasing pressure to survive, and at least one may be forced to close ahead of schedule.

1. The Australian government renewable energy target can cause power shortages

Analysts believe that the closure of coal-fired power plants may lead to a shortage of dispatchable power, thereby increasing the probability of grid failure.

The Institute of Energy Economics and Financial Analysis of Australia (IEEFA) and the Green Energy Market released a joint report stating that between 2018 and 2025, new wind and solar power plants will add 70,000 gigawatt hours of additional supply.

This will result in a decline in the output of many existing fossil fuel power generators. IEEFA predicts that by 2025, compared with 2018, the power generation from natural gas power stations will drop by 78%, and the power generation from coal will drop by 28%.

2. The Australian government renewable energy target cannot ignore old thermal power generation

The Australian Energy Commission, which represents coal, natural gas, hydropower and renewable energy generators, said that as more renewable energy enters the system, the energy wholesale market is undergoing "significant changes." One of the recognized changes is that the Australian Federal Government's hydropower investment will enable renewable energy to completely replace coal-fired power generation, and the Australian Government renewable energy target will develop in a high proportion.

In response, Sarah McNamara, Chief Executive Officer of the Australian Energy Council, emphasized that "the key issue will be to ensure the orderly exit of old thermal power plants, investment in dispatchable power generation, and encourage appropriate resources. Combine with system services as a whole to maintain the safety and reliability of the system."

In fact, the industry believes that if blindly emphasizing the achievement of the Australian government's renewable energy goals and ignoring the orderly withdrawal of coal-fired power plants and the construction of flexible and dispatchable low-carbon power sources, it will bring risks to the security of future power supply.