The Times Australia
The Times World News

.

The end of coal is coming 3 times faster than expected. Governments must accept it and urgently support a 'just transition'

  • Written by Tim Nelson, Associate Professor of Economics, Griffith University
The end of coal is coming 3 times faster than expected. Governments must accept it and urgently support a 'just transition'

Coal is likely to be completely gone from Victoria’s electricity system by 2032 with most other parts of Australia not far behind, a report from the Australian Energy Market Operator (AEMO) declared last week.

The report, called the 2022 Integrated System Plan[1], confirmed what many of us in energy policy have long known: the end of coal is coming, and the pace may take some industries and governments by surprise.

The Integrated System Plan[2] (ISP) is effectively the planning “blueprint” the market operator publishes to help industry and policy makers assess how Australia’s electricity system might evolve. It’s an incredibly important document for guiding where and when investment is needed to unlock new renewable resources to meet demand.

Given ISP’s prediction for the rapid closure of coal-fired power stations, it’s critical governments don’t stick their heads in the sand. Continuing to deny the impending end of coal-fired generation is simply not in the interest of coal workers and their communities, who urgently need support.

What is AEMO predicting?

The most important aspect of the ISP is that what used to be called the “step change” has now become the “central scenario”. For the first time, this central scenario is consistent with Australia’s commitment under the Paris Agreement and limiting global temperature rise to under 2℃.

The ISP is forecasting that huge volumes of coal will be retired in the next ten years, including all brown coal and two-thirds of black coal, and significant investments in new renewables and “firming technologies” (such as batteries, gas, and pumped hydro) will take their place.

‘Firming’ technologies like pumped hydro are critical to ensure Australians have electricity when wind and solar aren’t available. Shutterstock

Around 14 gigawatts (GW) of coal is now assumed to be exiting the National Electricity Market this decade – more than three times the amount of coal retirements the industry has announced.

Effectively, AEMO is saying (yet again) that the incumbent industry is likely to be caught by surprise[3] by the speed of the transition.

It’s not just an explosion of renewables investment that AEMO predicts. Around 9GW of gas-fired generation and an extra 620GW hours of storage (provided by batteries or pumped hydro) will be required to provide backup generation capacity when solar and wind are unavailable.

Read more: Coal plants are closing faster than expected. Governments can keep the exit orderly[4]

Electricity demand is expected to surge out to 2050 and will double to at least 350 terrawatt hours. This includes from electric vehicles uptake, converting natural gas heating and hot water to electric in homes, and electrifying many industrial processes such as low-emissions steel and aluminium.

All these developments will require a major overhaul of the grid. The ISP states around A$12.5 billion in transmission spending needs to occur to unlock $29 billion in investment benefits.

Why is coal being left behind?

There are two main drivers for this significant substitution of coal for new technologies.

First, the cost of these technologies[5] continues to fall rapidly and consumers are voting with their feet[6]. Some of Australia’s largest and most iconic businesses are increasingly buying 100% of their energy from renewable resources, including Woolworths, BHP and Coles.

Read more: Solar curtailment is emerging as a new challenge to overcome as Australia dashes for rooftop solar[7]

Second, state governments have filled the void left by the lack of a nationally consistent energy and climate policy, and are now implementing ambitious policies to drive the uptake of renewable energy and firming.

The most ambitious of these policies is the NSW government’s 12GW energy roadmap[8], which effectively prepares for the retirement of ageing coal-fired power stations by facilitating investment in new capacity.

Tesla charging station Electricity demand is expected to surge out to 2050. Shutterstock

So what should governments be doing?

It is critical governments focus on a “just transition” to these new technologies, and provide support to communities and workers[9] most impacted, such as those in the Hunter and Latrobe Valleys.

Structural adjustment policies[10] such as job placements, relocation assistance, or financial support to transition local economies are vital to secure opportunities for these regions. Retraining ahead of closures will help workers transition to new or related industries[11].

Everyone who uses energy must be afforded access to the clean energy transition. At present, the biggest barrier to participating in the solar and battery revolution is owning your own home.

Governments have been absent from this important policy debate. Australian low-income and rental households should be prioritised[12] in any future policies that support adoption of solar and battery storage.

Roofs with solar panels Rental homes have been left out of policy debates on renewables. Shutterstock

Governments must also ensure the private sector (rather than consumers) wear the risk of poor investments. Governments are increasingly taking on very significant risk (on behalf of consumers) through underwriting renewable energy and firming investments of large multi-national energy businesses.

Some economists (including us) have been providing alternative models[13] for governments to achieve the same objectives, but with greater focus on reducing risks to consumers.

Read more: Economists back carbon price, say benefits of net-zero outweigh costs[14]

Given the surge in households and businesses voluntarily buying renewable energy, it’s important consumers know what they’re getting. The Clean Energy Regulator is doing some interesting work in this space by developing an emissions and renewable energy transparency register[15] as part of the national greenhouse and energy reporting framework.

If governments really wanted to help, they could introduce a carbon price[16]. Such a policy is considered political poison, but a carbon price would result in us reaching this future in a much less costly and more orderly way.

The end of the coal age

The ISP is forecasting a better and cleaner future. Australia has great opportunities from moving beyond the coal age and into the age of efficient renewable energy, as we’re blessed with some of the best renewable resources on the planet

With global leaders increasingly focused on rapidly reducing emissions, we have a lot to gain through new industries, such as green hydrogen and mineral processing. Both major political parties[17] at the national level have targets that don’t really push beyond what AEMO now thinks is the status quo.

The stone age didn’t end because of a lack of stones. And the coal age is ending despite an abundance of it – whether governments believe it or not.

Read more: Labor’s 2030 climate target betters the Morrison government, but Australia must go much further, much faster[18]

References

  1. ^ 2022 Integrated System Plan (aemo.com.au)
  2. ^ Integrated System Plan (aemo.com.au)
  3. ^ incumbent industry is likely to be caught by surprise (reneweconomy.com.au)
  4. ^ Coal plants are closing faster than expected. Governments can keep the exit orderly (theconversation.com)
  5. ^ cost of these technologies (www.csiro.au)
  6. ^ consumers are voting with their feet (businessrenewables.org.au)
  7. ^ Solar curtailment is emerging as a new challenge to overcome as Australia dashes for rooftop solar (theconversation.com)
  8. ^ NSW government’s 12GW energy roadmap (www.energy.nsw.gov.au)
  9. ^ communities and workers (www.actu.org.au)
  10. ^ Structural adjustment policies (journals.sagepub.com)
  11. ^ new or related industries (australiainstitute.org.au)
  12. ^ low-income and rental households should be prioritised (www.sciencedirect.com)
  13. ^ alternative models (onlinelibrary.wiley.com)
  14. ^ Economists back carbon price, say benefits of net-zero outweigh costs (theconversation.com)
  15. ^ transparency register (www.cleanenergyregulator.gov.au)
  16. ^ carbon price (theconversation.com)
  17. ^ major political parties (theconversation.com)
  18. ^ Labor’s 2030 climate target betters the Morrison government, but Australia must go much further, much faster (theconversation.com)

Read more https://theconversation.com/the-end-of-coal-is-coming-3-times-faster-than-expected-governments-must-accept-it-and-urgently-support-a-just-transition-173591

Times Magazine

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Times Features

Duke of Dural to Get Rooftop Bar as New Owners Invest in Venue Upgrade

The Duke of Dural, in Sydney’s north-west, is set for a major uplift under new ownership, following its acquisition by hospitality group Good Beer Company this week. Led by resp...

Prefab’s Second Life: Why Australia’s Backyard Boom Needs a Circular Makeover

The humble granny flat is being reimagined not just as a fix for housing shortages, but as a cornerstone of circular, factory-built architecture. But are our systems ready to s...

Melbourne’s Burglary Boom: Break-Ins Surge Nearly 25%

Victorian homeowners are being warned to act now, as rising break-ins and falling arrest rates paint a worrying picture for suburban safety. Melbourne residents are facing an ...

Exploring the Curriculum at a Modern Junior School in Melbourne

Key Highlights The curriculum at junior schools emphasises whole-person development, catering to children’s physical, emotional, and intellectual needs. It ensures early year...

Distressed by all the bad news? Here’s how to stay informed but still look after yourself

If you’re feeling like the news is particularly bad at the moment, you’re not alone. But many of us can’t look away – and don’t want to. Engaging with news can help us make ...

The Role of Your GP in Creating a Chronic Disease Management Plan That Works

Living with a long-term condition, whether that is diabetes, asthma, arthritis or heart disease, means making hundreds of small decisions every day. You plan your diet against m...