By Gavin Dennett, EcoGeneration editor

Ahead of the federal election that is looming on the horizon, the Clean Energy Council is urging the next Federal Government to establish a new authority with at least $1 billion funding to invest in transition initiatives in coal communities across Australia.

The plea comes on the back of the announcement by AGL on 10 February, 2022, that has accelerated the closure date of its two biggest coal-fired power plants by several years, responding to a market shift towards renewables.

The soon-to-be-demerged energy giant revealed plans to bring forward the closure of its Bayswater coal-fired power station in the NSW Hunter Valley to “no later than 2033” from its original cease date of 2035. It’s Loy Yang A power station near Traralgon, in east Victoria, will also close early, in 2045, from its original close date of 2048.

The Clean Energy Council expects this news from AGL to be part of a wave of announcements signalling the early closure of fossil fuel generators across Australia, and is emphasising the need for greater support and certainty for coal communities and industry as the phase-out of coal generation accelerates.

Clean Energy Council chief executive Kane Thornton says any new government authority would need to heed the lessons from closure of the Hazelwood Power Station, in Victoria’s Latrobe Valley in 2017, and co-ordinate and leverage resources and capability across local government, unions, training providers, universities and regional development initiatives.

Funding would allow these parties to support targeted investment in the transition to renewables and stimulate new economic and employment opportunities for communities in these regions.

“This announcement [by AGL] is a reminder that coal power stations will close faster and faster,” says Thornton. “That means every effort must be taken to accelerate the roll-out of the wind, solar, storage and transmission that is needed to complete our shift to a modern electricity system.”

Australia’s transition to clean energy is well and truly underway. In its “Draft 2022 Integrated System Plan”, the Australian Energy Market Operator predicts renewables will comprise 79 per cent of the National Electricity Market by 2030, which necessitates the retirement of more than half of current coal capacity in the next eight years.

“The massive uptake of renewable energy is creating thousands of jobs, driving down power prices and resulting in a fundamental shift for Australia’s energy system,” says Thornton. “This is allowing more of our very old, expensive and polluting coal-fired power stations to close.”

The International Energy Agency’s “Net Zero By 2050” report says the world must phase out all unabated coal plants by 2040, while the least efficient coal plants – which is most of Australia’s coal fleet – needs to be phased out by 2030.

Australia has 24 coal-fired power stations currently in operation, and around 75 per cent of them are already beyond their intended lifespan.

“By the time the next federal election rolls around, Liddell Power Station [near Muswellbrook in NSW] will have closed, and Yallourn Power Station [in east Victoria] will be a few years from closure, which is why policy decisions made at this election are critical,” says Thornton.

“International and Australian experience shows that proactive, planned approaches to industrial transition are likely to achieve far better economic and employment outcomes than reactive, emergency action after closures are announced.

“It is imperative that industry, government, unions and communities work together to manage this inevitable transition so people and their communities aren’t left behind.

“There are enormous opportunities in the new energy world, but it requires leadership, planning and commitment to unlock and take everyone with us.”

AGL generates around one-fifth of the National Energy Market’s power, and the company says the timing of the closures of the Bayswater and Loy Yang A power plants will depend on “the readiness of the entire energy system to operate without our critical baseload generation”. Ultimately, market forces may decide on even earlier possible closure dates, with the company providing “closure windows” of 2030-2033 for Bayswater, and 2040-2045 for Loy Yang A.

By the end of the 2021-2022 financial year, AGL plans to demerge, with most of the generation units going into its Accel Energy spin-off, and the retailing arm to comprise AGL Australia.