The Times Australia
The Times World News

.

Shutting Australia’s dirtiest coal plant a decade early won’t jeopardise our electricity supply

  • Written by Tim Nelson, Associate Professor of Economics, Griffith University
shutting Australia’s dirtiest coal plant a decade early won’t jeopardise our electricity supply

AGL Energy – Australia’s largest emitter[1] of greenhouse gases – announced this week[2] it will shut the Loy Yang A power station in Victoria’s LaTrobe Valley in 2035, a decade earlier than planned.

This is significant for the Australian electricity industry. Loy Yang A[3] provides around 30% of Victoria’s power and is Australia’s largest single emitting[4] industrial facility.

But while the announcement has made headlines, it comes as no surprise. The power station burns brown coal which, while cheap, is an inefficient and emissions-heavy source of electricity. Brown coal-fired power stations are also failing to compete with the gathering pace of renewables.

AGL promises to replace the electricity provided by Loy Yang A with large-scale renewables and firming generation (such as batteries). This is, in my view, the most important commitment, because it’ll help ensure Australians have reliable electricity in the decades to come.

A big week in energy

AGL emits more than 40 million tonnes of carbon dioxide equivalent each year. Its announcement to bring forward Loy Yang A’s closure is no doubt largely in response to consumer and shareholder views[5] that the electricity sector must decarbonise.

Consumers are voting with their feet and increasingly demanding electricity sourced from renewable generation. Indeed, Woolworths, BHP and Aldi are just a few high profile brands that have committed to buying 100% renewable energy[6].

Three protesters in masks with signs against AGL
Greenpeace activists stage a protest outside the AGL Energy headquarters in March 2022. AAP Image/Luis Ascui

The announcement comes amid a big week of energy news. The Queensland government released its Energy Plan[7], which promises to shift the state to 70% renewable energy by 2032 and 80% by 2035. The plan involves an estimated A$62 billion of investment in the energy system up to 2035.

Meanwhile, the Victorian government announced[8] plans for 2.6 gigawatts of new energy storage capacity by 2030, jumping to 6.3 gigawatts by 2035.

This is all against the backdrop of the federal government’s commitment to have 82% renewables[9] in the Australian grid by the end of the decade.

Read more: Australia's biggest carbon emitter buckles before Mike Cannon-Brookes – so what now for AGL's other shareholders?[10]

Brown coal vs low cost renewables

Loy Yang A is in the Latrobe Valley, which has enormous reserves of very cheap brown coal. Brown coal is physically difficult to export[11], so the cost of brown coal electricity generation remains very low, even at times of high international energy prices.

But these advantages are more than offset by brown coal’s major disadvantage: it is one of the least efficient and most emissions intensive types of electricity generation.

The Victorian government has a legislated target[12] of 50% renewable energy for the state by 2030. Such significant investments in new renewables have undermined the viability of brown coal fired power stations.

And the wave of investment is set to intensify. The Victorian government has committed to 2 gigawatts of offshore wind[13] by the end of the decade, and a total of 9 gigawatts by 2040. In terms of energy output, this is the equivalent of two Loy Yang A power stations.

Rooftop solar The success of rooftop solar has undermined economics of brown coal. AAP Image/David Mariuz

But it is Australia’s love for rooftop solar that has really undermined the economics of brown coal.

Around 30% of[14] homes in Australia have rooftop solar panels. In fact, the total capacity of rooftop solar[15] is now almost equal to the entire remaining capacity of coal fired generation.

When the sun is shining, rooftop solar significantly reduces the amount of electricity demand from the national grid. This forces coal-fired generators to reduce their energy output significantly. In the evening, when electricity demand peaks, coal-fired generators must then ramp up their generation again.

Read more: 4 ways to stop Australia's surge in rooftop solar from destabilising electricity prices[16]

Coal generators weren’t built to be ramped up and down to meet demand. They were built to be switched on and left operating at their maximum output, all day every day. Operating them like a yo-yo effectively ages them prematurely, bringing forward major maintenance expenditure and the likely end of their operating lives.

The impact on grid-based electricity demand in South Australia is shown in the chart below. It is clear that over the past ten years, grid demand in the middle of the day has fallen substantially due to the impact of solar, making it very hard for inflexible older coal plants to compete.

Changes to South Australian electricity demand over the past decade. This new shape of electricity demand is called the ‘duck curve’ (or in Australia, the ‘emu’ curve!) Tim Nelson

AGL’s even more important commitment

While the focus has been on the closure of Loy Yang A, the more important commitment relates to AGL building the new generation required to replace it. In its Climate Transition Action Plan, AGL stated[17]:

We will seek to supply our customer demand with [around 12 gigawatts] of additional renewable and firming capacity, requiring a total investment of up to $20 billion, before 2036.

Our initial target is to have up to 5 GW of new renewables and firming capacity in place by 2030, funded from a combination of assets on our balance sheet, offtakes and via partnerships.

In other words, AGL will replace Loy Yang A with a mix of wind, solar, battery storage and other firming generation that, when combined, do the same job Loy Yang A does now - provide electricity all day every day.

This is exactly what energy consumers need: a commitment to not only close a large coal-fired power station, but a complementary commitment to build the two types of technologies required to replace it on a like-for-like basis.

Some may argue AGL’s announcements are long overdue. But with Origin Energy[18] and AGL both indicating that the future is firm renewable energy, it’s becoming ever more likely that 100% renewable electricity in Australia’s electricity grid could be achieved by the end of the decade. That’s fantastic news for consumers, and for the climate.

Read more: NSW's biggest coal mine to close in 2030. Now what about the workers?[19]

References

  1. ^ largest emitter (www.cleanenergyregulator.gov.au)
  2. ^ announced this week (www.agl.com.au)
  3. ^ Loy Yang A (www.agl.com.au)
  4. ^ largest single emitting (www.climatecouncil.org.au)
  5. ^ shareholder views (www.reuters.com)
  6. ^ committed to buying 100% renewable energy (www.energetics.com.au)
  7. ^ Energy Plan (statements.qld.gov.au)
  8. ^ Victorian government announced (www.abc.net.au)
  9. ^ 82% renewables (twitter.com)
  10. ^ Australia's biggest carbon emitter buckles before Mike Cannon-Brookes – so what now for AGL's other shareholders? (theconversation.com)
  11. ^ difficult to export (theconversation.com)
  12. ^ has a legislated target (www.energy.vic.gov.au)
  13. ^ offshore wind (www.energy.vic.gov.au)
  14. ^ 30% of (www.energy.gov.au)
  15. ^ total capacity of rooftop solar (www.aemo.com.au)
  16. ^ 4 ways to stop Australia's surge in rooftop solar from destabilising electricity prices (theconversation.com)
  17. ^ AGL stated (www.agl.com.au)
  18. ^ Origin Energy (www.theaustralian.com.au)
  19. ^ NSW's biggest coal mine to close in 2030. Now what about the workers? (theconversation.com)

Read more https://theconversation.com/so-long-loy-yang-shutting-australias-dirtiest-coal-plant-a-decade-early-wont-jeopardise-our-electricity-supply-191577

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...