Gas and coal-fired power plants should be paid to protect reliable energy: Australian Energy Commission


All energy generators, including traditional gas and coal-fired power plants, should be paid to make their capacity available when needed to ensure a reliable supply. New draft paper..

The Australian Energy Security Commission (ESB) highlights the current important role fossil fuels have played in the country’s energy grid as the country transitions to renewable energy sources.

The “capacity mechanism” guarantees generator payments even when waiting to meet rising demand and avoid supply shortages.

“It would be more efficient to pay to keep existing generators on the market to minimize consumer costs,” a paper published on June 20 said.

The ESB stressed that “wagers are higher than ever” and outlined the challenges facing the energy grid. The most pressing of these is the aging and early retirement of coal generators.

This follows the shocking decision by the Australian Energy Market Operator (AEMO) on June 15 to shut down the entire national energy market to ensure a reliable energy supply. The domestic energy market covers all jurisdictions except Western Australia and the Northern Territory.

AEMO predicts that electricity demand will at least double by 2050. However, all coal-fired generators, which currently account for more than half of the national energy market’s electricity generation, are expected to stop generating electricity by 2043 at the latest.

Epoch Times Photo
Climate Change Energy Minister Chris Bowen spoke to the media at a press conference on June 23, 2021 at the Mural Hall of the Parliament Building in Canberra, Australia. (SamMooy / Getty Images)

Federal Energy Minister Chris Bowen said Australia needs “every part of the ignition of existing technology,” including coal, which played a “very important” role in the short term.

“The Energy Security Commission says that a combination of technologies should be combined. Of course, existing coal-fired generators need to be repaired, and they are being repaired and are being repaired.” He told reporters on June 20th.

Bowen said he would work with the state and territory energy ministers to develop a national framework capacity mechanism, but the state could adjust to its own needs.

Adam Band, the leader of the Greens, criticized plans to pay for coal and gas generators and said they would bring out the immediate energy problems.

“Paying them to stay in the system for a long time only prolongs the problem and prolongs the transition to renewable energy,” he told ABC.

In response, Bowen said the mechanism “complements” the country’s emission reduction targets and their significant renewable energy transformations.

Prime Minister Anthony Albanese said the mechanism was “common sense” and was likened to the “insurance system” of the energy system.

The ESB said it should be operational by 1 July 2025 if the Energy Minister agrees to implement the capacity mechanism.

The draft plan is open for industry consultations until July 25th.

Rebecca Chu


Rebecca Zhu is based in Sydney. She focuses on Australian and New Zealand national affairs. Do you have a hint? Contact her at [email protected].