Canada lights the way
Australia should take note of the hard lessons learned by our allies as we ready ourselves for the move away from coal. By Nick Cater.
Late last month, energy company AGL lodged an application to blow up its Liddell coal-fired power station in NSW. It’s a shame it can’t be dismantled and packed into shipping containers because the Germans would take it in a flash.
At Garzweiler, near Cologne, the demolition crews are chopping down wind turbines to get to the coal beneath the ground. German Chancellor Olaf Scholz has announced the reopening of five power plants burning low-grade lignite. The life of three nuclear generators is being extended.
Yet Australia, apparently, has so much energy to spare that it can close its fourth-largest coal generator in five months’ time and the lights won’t even flicker. We’ll see.
In June we witnessed a dress rehearsal of Liddell’s closure. A series of outages by coal generators coinciding with rising winter demand brought the National Energy Market to the brink of collapse. The situation was so dire that NSW Energy Minister Matt Kean went on the radio to plead with customers to avoid using their dishwashers until after the evening peak.
At 6.55pm on June 12, the Australian Energy Market Operator ordered Queensland coal generators to turn up the throttle. By 6.30 the next morning, the interconnector from Queensland to NSW was running red hot. At 7am electricity was flowing at three times the safe capacity.
As the sun rose, solar panels offered some relief, but the emergency was far from over. At 6.30pm on June 13, desperate for every megawatt of dispatchable power it could muster, the AEMO ordered Snowy Hydro to crank up its turbines at Colongra on the NSW Central Coast. In normal circumstances, Colongra runs on natural gas. Since the price of gas had gone through the roof, however, the turbines were running on diesel.
So much for a smooth transition from hydrocarbons to clean energy. NSW avoided blackouts last winter by turning to one of the dirtiest forms of fuel available. What happened on June 13 was far from an isolated incident. At the peak of the grid crisis in the second week of August, diesel was generating 2 per cent of dispatchable power in the NEM.
If any grounds remain by which the federal and NSW governments can prevent AGL committing this act of industrial vandalism then it must use them, because even if Liddell stays open, the grid will be stretched to the limit. Federal Energy Minister Chris Bowen should insist demolition is postponed until AGL replaces like with like. Instead, we’re being fobbed off with puffery about AGL’s investment in wind and solar and its plans for green hydrogen.
AGL scrapped its plan to install gas generators on the site some years ago but it isn’t abandoning Liddell completely. The company has promised to install a 500MW lithium-ion battery in partnership with Andrew Forrest’s Fortescue Future Industries.
Even if it were up and running by the time Liddell closes, which it won’t be, it will be virtually useless in the kind of emergency that came close to blacking out NSW in June. A 500MW battery stores the equivalent of 0.01 per cent of NSW’s weekly energy consumption.
Blowing up Liddell will be just the start of our woes. In August 2025 the country’s largest generator at Eraring will be replaced with another fizzer of a battery. Others must follow if the AEMO is to stay on track with its plan of retiring 60 per cent of coal capacity by the end of the decade.
For a moment, let us put scepticism aside and assume Bowen’s plan to install 64 million solar panels, erect 3800 wind turbines and string up 28,000km of transmission lines is the solution. But unless he can get them up and running by April, Bowen must abandon wishful thinking and face facts. The laws of physics and the challenges of engineering mean the near-instant shift to zero emissions many expect simply cannot occur. The modern world was built to run on hydrocarbons and transition will take much longer than we have so far imagined, if it can be achieved at all.
Not every Western country is making such a hash of things. The government of Ontario announced the closure of its coal-fired power plants in 2003. The Thunder Bay Generating Station, the final coal plant in Ontario, stopped burning in 2014. Today the province remains the powerhouse of the Canadian economy and a centre for manufacturing.
Ontario seized the advantage by investing in nuclear power and a relatively light touch with wind and solar. The province is home to five of six Canadian nuclear reactors including the largest nuclear power station in the world.
Ontario has become an early adopter of small modular reactors, the first of which is under construction at Darlington Point, adjacent to an existing nuclear reactor. The first SMR could be in operation by 2028 and will have a life of 60 years. Australia’s wind and solar infrastructure will need to be replaced three or four times in that period, if we were foolish enough to persist on that path.
SMRs would be the best possible replacement baseload generators for Australia’s remaining coal-fired power plants if we had a government bold enough to rise to the challenge. Four SMRs, stacked in sequence at Liddell covering as little as 18ha, would comfortably cover the gap left by the withdrawal of coal.
Bowen claims the adoption of nuclear would push up power prices and crowd out cheaper and cleaner technologies, insisting that firmed renewables are quicker to build and cheaper to operate. “Those who say otherwise are either dangerously ignorant or simply seeking to perpetuate the climate wars,” he says.
In fact, the retail electricity price in Canada was about the same as the price in Australia in 2005 before the renewable energy investment boom began. Today, Canadians are paying half as much as Australians and enjoy the third-lowest prices in the OECD. Energy ignorance runs deep.