The last coal generator in New South Wales, the 1.4GW Mt Piper facility near Lithgow, is to be managed out of the grid early in a radical new plan that will mean the country’s biggest state will be effectively coal free in a decade.
Mark Collette, the CEO of EnergyAustralia, has gone into detail about his company’s plans to phase down the operation of Mt Piper, to ensure that the coal generator is “getting out of the way” of the green energy transition that is sweeping Australia, and much of the rest of the world.
Collette’s plan, explained in detail in an interview in the latest episode of RenewEconomy’s Energy Insiders podcast, is significant because it means that – despite the posturing over the planned closure dates of the Eraring and Vales Point generators, the country’s biggest grid could be coal-free before the end of 2033.
Mt Piper has a nominal closing date of 2040. That remains unchanged but three-phase plan announced by EnergyAustralia means that it will be out of the system much earlier.
In the first phase the operations of Mt Piper will be modified so it can effectively dance around renewables, ramping up and down quickly in response to market conditions and the output of wind and solar.
The second phase – which Collette sees coming “in the next few years” – is “sometimes on” – switching off one or both of the 700MW units when renewables output is strong.
“Once we have the battery and Lake Lyle and Talawarra B, we have the tools to turn mount Mt Piper off and then turn it back on when it’s required,” Collette says.
“And again, as we look to accelerate to net zero, getting out of the way and we don’t need to be there is a big part of how we do that day to day.
“And then more than that, we see a third phase with Mt Piper, assuming Australia can hit the 82% renewables target by 2030, that we see coming to life in the early to mid 2030s, which is a reserve role.”
This, he says, means switching both units off, and using them only in the case of seasonal downturns, maybe for one or two weeks in winter, during renewable droughts that the Germans call “Dunkelflaute”, if the batteries and pumped hydro on the grid can’t fill that gap.
Exactly how such an arrangement is struck with the market operator, or the state government, remains to be seen.
“With the right sort of preparation, we think that’s a feasible role,” Collette says. “Of course, the market and policy structures would have to adapt to support that role. It’s not something we think works in the existing market.
“But equally, we’re talking about a role that comes to life and we think something like 10 years, maybe sooner, and there’s plenty of time for the market to adapt.”
It is a welcome and significant development, because it means that the state is – more or less – on track with the vision of former energy minister Matt Kean, who laid down the framework for the coal exit, and its replacement by renewables.
That roadmap is suffering teething problems – a mixture of transmission delays, planning bottlenecks, and design issues with the new renewable energy zones – that is leading to talk of a delay to the planned closure of the country’s biggest coal generator, the 2.8GW Eraring facility, in August, 2025.
The debate around the closure of Eraring has been largely hijacked in mainstream media by climate deniers and nuclear boosters (often the same people), who want the country to keep on burning coal.
But any Eraring extension is likely to be limited to a couple of units, and for a maximum of two years. Even that extension will be controversial, given that the market operator is making clear in its latest reliability outlook that the state and federal government’s capacity auctions will be enough to fill the gap.
The new owners of Vales Point, a 1.2GW facility, are also playing ducks and drakes with their closure times, having recently extended the “life” of the plant from its previous planned closure date of 2029 to 2033, when it will be more than 50 years old, and hardly dependable in extreme weather.
AGL owns the other big coal generator, the 2.6GW Bayswater facility, which it says will be closed in 2032 or 2033. Like Mt Piper and Vales Point, that timing will depend on the successful building of new wind, solar, storage and transmission lines. It could be earlier.
A 2033 closure date for all three would complete a remarkable transition – and one of the fastest and most significant in the world, given the key role of NSW as one of the world’s biggest coal exporters and host to one of the biggest coal ports.
EnergyAustralia is planning a significant investment of its own in battery and pumped hydro storage to fill the gap.
Till now, it has largely been a contractor and offtaker of storage, with deals for the Gannawarra and Ballarat batteries in Victoria, the new Riverina battery in NSW, and the 250MW, eight hour Kidston pumped hydro plant being built in Queensland.
It is also building a new 316MW gas generator at Tallawarra which Collette says – like the Riverina and Kidston projects – is coming in more or less on time and on budget, which is no mean feat given the delays and cost blowouts of other projects, particularly those of Snowy Hydro.
Collette confirmed the company is nearing investment decisions on a potential 500MW, four hour battery (2,000MWh) at Mt Piper, a massive 330MW, 10 hour pumped hydro project at the nearby Lake Lyell, the 350MW, four hour Wooreen battery in Victoria, and a 50MW, four hour (200MWh) battery next to its Hallett gas generator in South Australia.
“These are all big projects for us,” Collette told the Energy Insiders podcast. He said the company would look at bringing in partners to some of the projects.
EnergyAustralia has previously shuttered the Wallerawang coal plant near Mt Piper, and that site could potentially host two giant batteries – one by Shell Energy and Greenspot and another by French renewable energy developer Neoen.
The company is also seeking 3,000MW of new wind and solar capacity through ownership of off take deals – to add to its relatively meagre total now of 850MW – and has emerged as a partner in a new consortium with an ambitious 5GW offshore wind proposal in Victoria.
Collette is also focused on electrification, and a new push to engaging consumers with packages that look to rooftop solar, battery storage, electric vehicles, and kicking gas out of the home.
“A big part of our activities is looking to shape the nature of our business for customers … in homes and businesses with distributed energy both in solar and … batteries, and the coordinated use of that energy through things like electric vehicle charging …. electric heating, and things of that nature.”
Collette has even electrified his own home, with rooftop solar and a household battery, and he has bought an electric vehicle, an MG, and switched out of gas heating to get a taste of what the electrification journey is like.
He says there is clearly work to do to make this an easy process for customers.
“It’s a really instructive exercise to go down this from the home perspective. One of the things that it really brings out for me is that winter is the challenge, not summer.
With solar, I can self supply our house during summer, we have no no particular issues with that. I can’t do it with during winter because we don’t just don’t have the generation to do that.”
But EnergyAustralia is pushing ahead with electrification as a major part of its business strategy.
“We’re a big believer in electrification … because we can see that it’s easier to take the emissions out of out of electricity than it is out of other industrial processes and gas.
“We’re looking at opportunities around particularly switching from gas heating to electric, and particularly heat pump style hot water systems.
“And if you think about our our solar home bundles structure I mentioned earlier, that sort of structure might be quite a good one that we can scale to higher levels to then make it easier for customers to deal with moving off the gas grid over time, and electrifying and decarbonising in a simple way.”
You can listen to the full interview with Collette, and a wrap up of the week’s big energy news, in the latest episode of the Energy Insiders podcast here.
