The hastening decline of coal-fired power is triggering a rethink of Australia's electricity market, with the Greens proposing a $40 billion renationalisation of the sector.
Origin Energy announced on Thursday it would close New South Wales's largest coal-fired power station in 2025, seven years ahead of schedule, which followed AGL's earlier announcement it was bringing forward the closure of two other coal-fired plants.
The federal government is looking to the private sector for more investment in "dispatchable" power, such as batteries, pumped hydro and gas to ensure the stability of the electricity grid as coal exits the system.
But the Greens have launched an audacious policy to recast Snowy Hydro as a not-for-profit, renewables-only generator and retailer, in the hope they will hold the balance of power in the next parliament.
"Our revamped Snowy Hydro would build 25 gigawatts of new renewables and storage, which is about the same as what the coal fleet currently puts out," Greens leader Adam Bandt told the ABC.
The Greens' plan would also see:
- All coal and gas-fired power plants phased out by 2030
- Snowy Hydro selling electricity at cost price to consumers
- A reversal of the federal government's $600 million investment in the Kurri Kurri gas power plant in the Hunter Valley
The Parliamentary Budget Office estimates it would cost $40 billion for the Commonwealth to construct the power, transmission and storage facilities required for the Greens' proposal.
Minor chance of plan becoming reality
The Greens' proposal would effectively renationalise the electricity system, wiping energy retailers and some generators out of the market.
There is no appetite from the major parties to adopt a takeover of the national electricity market.
But the minor party is hoping to have some leverage after the next federal election, if it manages to secure the balance of power in the Senate, or share the balance of power in the House of Representatives.
"This is the kind of idea that could get through the next parliament," Mr Bandt said.
"We are seeing that with coal-fired power stations closing when big corporations are deciding it's unprofitable, workers and communities are being left in the lurch," Mr Bandt said.
"So it's time for government to step [up]."
Federal Energy and Emissions Reduction Minister Angus Taylor is looking to the energy companies to fill any gaps created in supply and stability.
"Our preference has always been for the private sector to make those investments," he said, while also pointing to direct interventions the Coalition has made in the energy market, such as funding the Snowy 2.0 hydro project and Kurri Kurri gas-fired power plant.
"We are investing in a whole range of technologies. We're investing in gas, we're investing in pumped hydro, we're investing in batteries. All of those dispatchable sources of generation are important."
Coalition using Greens' climate ambition to campaign against Labor
The Coalition has repeatedly pointed to the prospect of the Greens forcing Labor to adopt more progressive policies on climate change as it campaigns for votes in electorates with coal and resources-based industries.
The Labor Party is proposing to spend $20 billion on its "Rewiring the Nation" policy, which would upgrade electricity infrastructure to accommodate new power and battery sources coming online.
But where Labor sees a role for gas as the electricity system transitions from coal to renewable resources, the Greens want both coal and gas-fired power eliminated by the end of the decade.
The Greens point to the success of the ACT reaching 100 per cent renewable energy as evidence of the viability of their plan, despite the ACT's goal being met using a very different approach, involving large-scale feed-in tariffs and reverse auctions.
ACT Minister for Energy and Emissions Reduction Shane Rattenbury, a Greens MLA, has backed the federal Greens' plan, concerned that the national grid is at the mercy of energy companies' bottom lines.
"Hazelwood [power station in Victoria, which closed in 2017] is the classic first example of that, where they just took a decision it wasn't worth investing anymore," he said.
"They [energy company Engie] shut it and we saw two years of skyrocketing electricity prices because of that single decision by that private corporation about their bottom line."
