by Christopher Allan, Journalist, Energy magazine
How might coal-reliant Australian regions find economic stability in a clean energy future? A new research report has analysed the challenges and opportunities that face South-West Queensland as it faces coal asset retirement. Here, we explore key insights from the research and look at the broader implications for energy transitions around the country.
Published by Australian policy think-tank Blueprint Institute, the report, Breaking new ground: Challenges and opportunities of a changing energy landscape in regional Australia: South-West Queensland, suggests that with the right support, regions that have long housed Australia’s coal assets could absorb the challenges of a shifting energy landscape, and even capitalise on emerging sectors for regional job creation.
With a focus on challenges facing South-West Queensland, the report models energy transitions around Australia, particularly in other regions facing coal asset closures and related issues of loss of local economic activity, a shortage in job opportunities, and even exiting migration from the region.
The challenges of closing coal
Stretching from the Simpson Desert to Toowoomba Range and encompassing communities like Chinchilla, Roma and Longreach, South-West Queensland has long served as a home to coal industries.
But with the Australian Energy Market Operator (AEMO) predicting that coal-fired generators will retire two to three times faster than previously anticipated, completely disappearing from the grid by 2043, South-West Queensland will need a campaign economic renewal to mitigate this changing energy landscape.
The report states, “For many decades, South-West Queensland has quietly prospered as a cornerstone of Australia’s agriculture and resource industries.
“Collectively, local coal assets currently employ over 1,500 workers directly and create opportunities for many more through indirect economic activity.
“South-West Queensland is currently unprepared to deal with the rapid coal phasedown which is underway.”
For example, in the community of Tarong, a township of 180 people, coal-related industries currently employ more than 15 per cent of the local workforce, and high wages from coal jobs have supported a variety of local businesses to prosper.
“The projected closure of the Tarong coal-fired generator in 2036–37 – though closure may come earlier as cheaper renewable energy alternatives enter the grid – will necessitate a proactive and efficient workforce shift to minimise the impact on the community,” the report said.
In addition to loss of jobs and local economic stimulation, the necessary closure of coal assets can also result in crippling migration from small towns, with South-West Queensland already experiencing limited population growth.
“Without action, this trend could accelerate into the kind of mass exodus seen in Spain’s former coal towns, as unemployed coal workers are forced to move to urban centres for low-paying, insecure jobs in service industries,” the report said.
Opportunities in renewable energy
The renewable energy sector will undoubtedly help South-West Queensland adapt its economy to a changing energy landscape, with renewable projects offering both ongoing operation and maintenance jobs as well as short-term jobs in construction and installation.
In fact, the report projects (conservatively) that incoming renewable installations will create 6,200 new jobs in South-West Queensland. A major Battery Energy Storage System (BESS) project in Tarong and the Kogan Creek renewable hydrogen demonstration plant will join existing renewable energy assets in the region, like Coopers Gap Wind Farm – Queensland’s largest operational wind project.
The model finds that initial job figures from renewable projects match the employment base of the local coal industry. However, the report concedes that renewable energy job creation will skew towards shorter term positions created in the construction of major infrastructure.
“It is unrealistic to expect the renewable energy industry alone to mitigate the inevitable loss of well-paying and stable coal jobs,” the report said.
“South-West Queensland requires considered policy that seizes the opportunity contained in the initial surge of investment in renewables, and channels it into lasting opportunities that produce jobs in diverse industries in the long term.”
Emerging industries
Some of the emerging industries with the power to support South-West Queensland’s economic revitalisation, alongside renewable generation investment, include clean industries and critical minerals mining.
Clean industries
Clean industries have already begun trials in South-West Queensland, with federal funding delivered for a methane demonstration project near Roma, and construction commenced on a hydrogen demonstration plant at Kogan Creek.
“Though the initial employment figures for these clean hydrogen feasibility projects are modest, the success of these early studies could lead to enormous benefits in Kogan Creek over the coming decades if the plants are scaled up,” the report said.
A hydrogen production facility at the Kumbarilla Renewable Energy Park, scheduled to commence in 2024, could create 144 short-term positions during construction as well as 480 ongoing positions to operate and maintain hydrogen production.
Critical minerals mining
Importantly, Australia’s clean energy future could offer a growth opportunity for our traditional mining industries. As the world’s largest lithium exporter and a major exporter of rare earth elements, Australia is entangled in global supply chains for construction of important clean energy assets like batteries, wind turbines and electric vehicles.
“By 2040, between 5,400 and 9,450 (depending on policy action) new jobs in critical minerals mining are projected in Queensland, with the greatest concentration of known sites clustered around Mount Isa,” the report said.
“While this would require South-West Queenslanders to relocate north, the close industry match could be a big advantage for those currently working in thermal coal mining.”
A path forward
The report concludes with recommendations for supporting the economic renewal of South-West Queensland in a changing energy landscape, including a suggestion for Federal Government to provide $20 million in funding to establish coal adaptation authorities in Groom and Maranoa.
A coal adaptation authority would analyse the region’s shift to clean energy, investigate implications for regional residents, and engage with communities to develop strategies that respond to local concerns.
It is also recommended that the Federal Government offer financial and administrative support to coal asset operators to develop proactive renewal strategies for exiting coal infrastructure.
This could involve federal funding that matches private investment from operators, up to $100 million per asset. Another report recommendation is for the Queensland Government is to ensure that five per cent of collected coal royalties are directed to coal adaptation authorities – which would have amounted to $175 million in 2019–20.
A further recommendation is that Queensland and local governments together maintain strong support for renewable energy zones and other new manufacturing and industrial precincts that will encourage investment into the South-West Queensland region.
“The shift to a clean energy economy may not seem easy for those local communities in the region that currently rely on coal, but it can succeed,” the report said.
“South-West Queensland possesses all the necessary ingredients to benefit from the future that is already knocking at our door.
