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What needs to happen as coal is phased out?
There’s very little economic future for fossil fuels, even if you ignore the environmental effects. Renewable energy is cheaper, including battery storage.
This means a large number of fossil-fuel generators – coal-fired power stations, in particular – will be closing down over the next decade, as they fail to compete with renewables. According to the national energy market operator, it’s likely that 60 per cent of coal stations will be shut by 2030, with all gone by 2043.
What role should a federal government play in managing coal’s exit? What provisions should be in place for coal workers who will lose their jobs? What’s the best way to keep the grid stable as it transitions?
And how does this compare to what the major parties are offering ahead of the election? Cosmos investigates.
A national plan for the end of coal
Overseas, a number of countries have been preparing for the decline of coal and are many steps ahead of Australia.
‘Germany is looked at as the gold standard in this space,’ says Dr Chris Briggs, a research director at the Institute for Sustainable Futures at the University of Technology Sydney.
Germany’s plan for the phase-out of coal has a few key features: progressive emissions reduction targets that are regularly updated; a formal agreement between major stakeholders (including coal companies and workers, governments and scientists); and an independent authority managing the transition.
The country is expecting to be coal-free by 2038, and may even bring that target forward by several years.
Strong climate policy helps with such a phase-out because it adds certainty to a system. If businesses know that a country or region is planning to be 50 per cent renewable by a certain date, for instance, they can predict which stations need to shut by then, and thus which other energy generators and employment opportunities need to replace them. These progressive targets are also a key feature of the UK’s decarbonisation plan.
‘If you talk to anyone in the industry sector, they plead some policy certainty to be able to plan,’ says Briggs.
A broad schedule for the closure of different stations, according to Briggs, ‘would allow the electricity market planners to make sure there’s sufficient generation and, of course, for communities and others to plan for the loss of jobs’.
An agreement between stakeholders adds to this certainty. Importantly, it also provides for the retraining of people who will lose their jobs at coal plants – such as Origin Energy’s strategy when it announced the 2025 closure of Eraring power station earlier this year. (The three-year notice period is a new requirement for coal stations, introduced after Hazelwood’s swift closure in 2017.)
Finally, a dedicated government authority would be a good way to help social and economic transition in former coal regions. Briggs highlights the La Trobe Valley Authority, established in 2016, as an example of this.
What will the coal workers do?
Some people who work at coal plants, such as electricians, will be able to find other work easily when coal stations shut.
Briggs points out that coal stations could also be good locations for new batteries, which could in turn provide further employment. ‘They have very good grid connection, there’s a lot of capacity there, they have all the infrastructure in place, [and companies could be] retraining the workforce for that,’ he says.
‘They don’t employ as many people as a coal-fired power station, so it’s not a complete solution, but there are some jobs there.’
So there will still likely be some workers left high and dry by the closure of coal-fired power stations.
‘I don’t think we, or anyone, has a complete answer for that question at the moment, which is part of the problem, really,’ says Briggs.
What are the parties planning?
The Liberal-National coalition has released no formal plan for the exit of coal. Beyond its 2030 and 2050 targets, the federal government hasn’t introduced progressive emissions reduction targets or any transition bodies, and it hasn’t announced plans to do so if re-elected.
The federal Labor Party has promised a $20 billion Rewiring the Nation plan if it wins government. This includes the establishment of a corporation to oversee the updating and change of the National Energy Market (the grid).
This plan assumes Australia will be transitioning to renewable energy, based on its economic efficiency, but it’s quiet on the timeline for the end of coal use – and on specific ways to transition coal regions, beyond mandating local supply and labour for the construction and manufacturing of new grid components.
The Greens have a detailed schedule for the exit of coal, including a proposed date for the closure of every coal generator in the country – all of which would happen before 2030. This schedule would be accompanied by the creation, or expansion, of local authorities to assist with regional transitions, and a ‘job-for-job guarantee’, subsidising wages for coal workers to find other employment.
‘It’s technically feasible,’ says Briggs of the Greens’ policy. ‘To actually achieve it would still require a war-style mobilisation. It’d be pretty heroic to do it that fast.’
The problems the Greens’ strategy encounters are logistical, rather than technical: labour, supply chains and community support would all need to be maximised to get it to work.
‘Whilst it sounds radical, they’re probably closer to the reality of what can and should happen than the major parties at the moment,’ says Briggs.
‘Even if we won’t get 100 per cent by 2030, I think there’s every chance we will get the majority of [coal stations] closed by the early 2030s.’
In the absence of current policy at the federal level, various state governments – such as the New South Wales government, which anticipates four of its five coal power stations shutting by 2030 – have introduced their own strategies.
‘The states are filling the vacuum in some ways, because they’ve got to a point where they said, “well, we can’t just keep waiting for the federal government to do something”,’ says Briggs.
But, because our electricity market operates on a national scale, a national plan would likely provide more energy security, and fewer spikes in power costs as generators change.
This article was originally published on Cosmos Magazine and was written by Ellen Phiddian. Ellen Phiddian is a science journalist at Cosmos. She has a BSc (Honours) in chemistry and science communication, and an MSc in science communication, both from the Australian National University.
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