A tectonic shift has begun in the Australian electricity industry, one with far reaching ramifications and the likes of which we’ve never seen. Following an executive restructure, AGL has announced that it will close all of its existing coal powered generators by 2050 and terminate investment in any future coal plants.
“It is important that government policy incentivise investment in lower-emitting technology while at the same time ensuring that older, less efficient and reliable power stations are removed from Australia’s energy mix,” Mr Vesey said.
The announcement means that the Nyngan Solar Farm is far more than just a gesture, or a PR exercise conceived to save face when accused of massive emissions. Rather it’s a confirmation that renewable energy is a feasible alternative to fossil-fuels when it comes to large-scale electricity generation, and if the largest polluter in the country can change its ways there’s no reason why others can’t follow.
What’s changed AGL’s tune?
As one of Australia’s “big three”, AGL ranks as the country’s largest greenhouse gas emitter followed closely by Origin Energy and EnergyAustralia. Far from being persuaded by the virtue of renewable energy, the decision is firmly entrenched in protecting their financial interests and maintaining their bottom line.
Although AGL claims they will “retire” their existing coal-fired plants by 2050, all three of their major plants were scheduled for closure before that date anyway. In fact just last year, they were attempting to expand their operations by acquiring Macquarie Generation’s assets including their Bayswater and Liddell power stations – all under the watchful eye of the ACCC.
Not only would further expansion come under similar scrutiny, but the domestic and global movement away from coal toward sustainable energy generation (which this announcement will surely only hasten) insures the company against future emissions reduction initiatives.
With 2050 still a generation away, it’s long term goals like this that will revolutionise the Australian energy market. The inevitable push toward sustainable electricity generation will improve the environment and needs to be financially beneficially for the larger players to step up to the plate. Well, that and the fact that it’s simply the right thing to do!
Despite all of the positive press, current AGL customers, or even their children, are unlikely to see the company switch to 100% renewable energy. Their recent investment in coal seam gas remains in place, with no sign that the hundreds of CSG wells will be decommissioned.
The news is also less optimistic for those hoping to see a dramatic decrease in their electricity bills. There’s absolutely no indication that AGL customers will be better off financially, meaning that generating your own electricity with a tailored solar power system will still offer the greatest dividends.