Ageing coal plants will be unavailable to supply power 34 pct of the time, new data suggests
Image Credit: EnergyAustralia
Sophie Vorrath
Apr 16, 2025
Policy & Planning
The practice of “sweating” Australia’s aged coal-fired power generators – keeping them in the electricity mix past their use-by date – risks exposing grids to substantial shortfalls in supply, a new report has found, potentially equivalent to cutting power to around 2 million typical households.
The report from the Institute for Energy Economics and Financial Analysis (IEEFA) reviews the historical availability of coal-fired power stations as they approach retirement – even before they are deemed officially past it – and finds that, on average, around one-third of the plants’ capacity goes missing.
Johanna Bowyer, lead analyst in Australian electricity at IEEFA, says a total of 13 coal-fired power stations, totalling 8 gigawatts (GW) of capacity, have so far exited the National Electricity Market, at an average age upon closure of 42 years.
“The average availability of these power stations in the 10 years before they retired was quite poor, at 66% on average,” says Bowyer. “That means that on average 34% of a plant’s capacity was unable to produce power.”
Tristan Edis from Green Energy Markets, who co-authored the report with Bowyer, says governments and energy market bodies should be planning for the likelihood Australia’s remaining coal power fleet will suffer a similar deterioration in their availability in the 2030s.
“Proposals that extend the life of existing coal power plants need to account for the fact that such old plants are likely to be far less reliable than they used to be, but this is often neglected,” Edis says.
“For example, Frontier Economics modelling of a strategy to delay the retirement of coal power plants assumed those coal power plants could achieve utilisation … of 72-81% over the mid 2030s to mid 2040s. This appears to be unrealistic given the experience of plants nearing retirement.
“If you were to assume more realistic utilisation in line with what we’ve seen in the past from power stations before they closed, you’d see a substantial shortfall in generation from coal of 9,300 gigawatt hours per year on average over 2034 to 2043.
“To put this into perspective, this is equivalent to around 2 million typical households without power,” Edis says.
The report notes that covering for these shortfalls at short notice will mean ramping up gas consumption – by between 49 and 93 petajoules (PJ) per year from 2034 to 2043 – which in turn will exacerbate gas supply shortfalls and drive up power prices.
“Such a surge in gas demand would be highly inflationary and challenging for energy security, given that AEMO forecasts significant shortages of gas supply for that period,” the report says.
“A study by Jacobs for the Clean Energy Council found that household power bills in the NEM could rise by $449 per year by 2030 if we had greater reliance on gas and coal and if renewables were built more slowly.
“Household bills could rise by $606 per year by 2030 if this occurred and a major coal-fired power plant failed unexpectedly.”
The findings of the extensive IEEFA report come as the Queensland LNP becomes the latest state government to step in and delay the retirement date of an ageing coal plant – in this case, CS Energy’s Callide B generator.
It has since emerged that a unit at the neighbouring Callide C coal plant had suffered major incident just before the announcement of the coal extension, that will take one of its 420 megawatt (MW) units offline for at least two months.
The Callide C4 unit was offline for more than three years from 2021, after an explosion nearly caused a state-wide blackout. Problems were also discovered in the cooling towers at C3, which were offline for more than a year.
Callide B, the plant the Crisafulli government intends to sweat, is the oldest and most unreliable of the two facilities, with analysts estimating that keeping it open could cost around $400 million a year and will likely need a new or expanded ash dam.
Queensland Conservation Council energy expert Clare Silcock says that over the last 18 months, the Callide power stations have only been available, on average, at 50% of their capacity.
“At Callide B, unit B1 suffered two outages during January 2025, one of the hottest months of the year, despite a major maintenance project taking it offline from July to December 2024,” Silcock says.
“To keep the lights on it’s clear we need to diversify our energy supply and build more renewable energy backed by storage. Extending the life of coal just means waiting around for the next breakdown.”
To this end, the IEEFA report makes clear that the cost and reliability risks of coal extension could be exacerbated if the technology chosen to replace coal could not be installed quickly enough.
Going down the path of Peter Dutton’s nuclear power plan, for example, could result in a potential energy supply gap of between 9,600 gigawatt-hours (GWh) to 94,500GWh per year – and potentially out until 2047, which is how long evidence suggests the plants will take to build.
“This is a substantial gap. To fill it would require either further life extensions to coal, compounding the aforementioned risks associated with life extension, or it would require an increase in other electricity generation sources,” the report says.
“As new electricity generators would not have a strong incentive to invest for the long term given the planned introduction of nuclear power, it could create a ‘dead zone’ for investment, making it challenging to secure energy supply in this period between coal exit and nuclear entry.”
The research by Bowyer and Edis also finds serious safety issues go hand in hand with ageing coal plants, with examples ranging from fires at Hazelwood, Yallourn, Morwell and Northern, and dangerous explosions at Muja AB, Yallourn, Hazelwood and, of course, Callide C.
“These examples serve as a warning that decisions to extend the operation of coal power stations should not be made lightly, and need to be made with a thorough understanding of the safety risks associated with these power plants,” Edis says.
“Delaying coal exits introduces risks to reliability, power prices, safety of workers and the community and could require expensive refurbishment costs,” Bowyer adds.
“It would also have major implications for emissions. Rather than seeking to delay the exit of coal, we need to be accelerating the roll-out of replacement capacity from renewable energy and battery energy storage.”
Sophie Vorrath
reneweconomy.com.au
My comments:
Tsk, tsk, tsk.
The dinosaurs are retiring.
Just too expensive to maintain and operate.
Timing out forever.
Especially in the face of renewables which cost haff as much to build and operate per kW here in the U.S. for example.
No new coal fired generation capacity will be built in the U.S. ever again.
Just as in many other countries...
Reality
Eric |
