Reflections on the Victorian energy transition

With the federal election out of the way, RepuTex Energy updated their forecasts for electricity generation capacity and wholesale prices to 2040.

Reputex's analysis confirms that coal-fired generation (brown and black coal) will decrease over time, in part because of cheaper electricity produced by renewables.

Their article raised a couple of interesting points for me.

1. Energy transition and the requirement to provide 5-year notice of closure for the Victorian coal-fired power stations

The Reputex analysis shows that brown coal electricity generation is set to decrease over the next 4 years (Victoria is the only State using brown coal).

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In 2018, as a condition for extending their mine licences in Victoria, Energy Australia and AGL agreed to provide a minimum 5-year notification of the closure of their power stations.

Reputex's forecasts don't necessarily mean that brown coal power stations will close soon, but the forecasts indicate that their output is likely to decrease within the next 4 years. It will be interesting to monitor the financial impact from that reduction in output, and what it means for when the 5 year notices may be invoked.

2. Necessary leadership on the energy transition away from coal

The States and Territories have shown great leadership in the energy space by legislating ambitious renewable energy targets, putting in place net zero carbon emissions targets, pushing for reform at COAG and funding their own innovative energy programs.

Another required (and more difficult) piece of leadership looms around the necessary orderly transition away from coal-fired electricity generation.

Most of the power stations are privately owned in Australia, so it is out of governments' hand to formally decide when they close. Governments can however show leadership by ensuring that the economic settings are right to promote an orderly transition.

Early planning and discussions will help buffer the impacts on regional economies, support affected workers, facilitate investment and allow the supply chains to adapt.

This article was originally published on my LinkedIn profile.


#energy #renewableenergy #energytransition

Marilyne Crestias