By 2035, 75 per cent of Australia’s coal-fired fleet could have retired, equating to 16.9GW of a 22.5GW system.
This is the view of BloombergNEF, which detailed the “inevitable decline” of Australia’s coal-fired power stations in a new report.
This comes despite last week’s extension of the Eraring power station by two years to 2029 – something which owner Origin Energy originally foretold in a May 2024 agreement with the NSW Government.
BloombergNEF found that coal still forms “the bedrock” of Australia’s power system.
“But these assets are aging, inefficient by modern standards and a major source of carbon emissions,” the market analyst said.
BloombergNEF said that of the 18 major coal plants operating in Australia, just 11 per cent of the capacity built after 2000 uses supercritical technology, with the majority underpinned by subcritical lignite and black coal tech.
The average age of Australia’s coal plants is 34 years, according to BloombergNEF, compared with a typical design life of 40 to 50 years. This would see around 23 per cent of Australian coal capacity reach its end of technical life by 2030, and 52 per cent by 2040.
After estimating it would require $920 million to prolong the technical life of the Liddell power station by five years beyond 2022, AGL Energy retired the asset in 2023.
The Hazelwood power station in Victoria was also set for a $400 million refurbishment before being closed due to being operationally unviable.
BloombergNEF said alongside its antiquated technology, Australia’s coal-fired fleet was also facing opposition from distributed energy resources.
“Energy supply from rooftop solar is increasingly dominating the midday merit order and eating into the production profiles of coal plants,” the market analyst said.
“Australia has installed enough rooftop solar systems to cover over one in three free-standing houses. These systems are exacerbating ‘duck-curves’ in net demand on the grid, impacting the volume and value of generation from large-scale assets.”
BloombergNEF said asset owners were also being increasingly pressured by shareholders and state emissions-reduction targets to lock in on renewables, with more than 60 per cent of coal capacity owned by either publicly-listed companies or companies with a publicly-listed parent.
The market analyst cited operational inflexibility and insecure coal supply as other headwinds for Australia’s coal-fired fleet.
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