Keri Schott says that one

PA leaders and ministers are divided over the role of gas in the clean energy transition

The legislature has previously rejected the need for fossil fuels to support renewable energy sources.

Bowen this week described the capacity mechanism as an “urgent issue” and said energy ministers would consider a range of options developed by the Energy Security Council (ESB).

The Social Security Board said states could have different operating principles in their jurisdictions, such as excluding fossil fuels.

Tight energy market conditions mean that “every technology and fuel plays an important role in keeping the lights on,” said Alinta, one of the nation’s largest electricity suppliers and owner of the Latrobe Valley Loy Yang B brown coal plant.

“So, yes, we need coal and gas to get them into the production capacity market,” Alenta CEO Jeff Demery said. “If you were to take away about 60 percent of the supply that the Latrobe Valley in Victoria provides, there wouldn’t be a lot of connectivity.”

Demere said that the Alenta was not advocating that coal stay in the mix “for a minute longer than necessary … as we continue to develop the next generation of energy such as offshore wind and hydro.”


“But they have a critical role in the short to medium term,” he said.

Frank Calabria, CEO of Origin Energy, welcomed “considered and collaborative” efforts between state, territory and the federal government to address the challenges facing the energy market, and said the proposed capacity mechanism should include storage and pumping of hydro and gas.

Short-term gas condensing plants will be a critical halt to outages by supporting long-term wind and solar farms that don’t run when the wind isn’t blowing or the sun isn’t working, said Tony Wood, director of energy at the Grattan Research Institute. shine on.

He added that regardless of the rules set to manage the production capacity market, coal would not be economically viable.

“I don’t know how renewables support other renewables,” Wood said, noting that batteries recharged by wind and solar still need to be supplemented with other power generation.

“Even the UK has some of its capacity mechanisms that encourage diesel reserves [for electricity generation]. “

Coal generators would be too expensive to run and too slow to ignite in short time, Wood said, to fill in the gaps in the grid when the weather changes.

“You need capacity that can come in very quickly and the problem for coal plants is that they are not very flexible.”

Kerry Schott, former head of ESB and architect of the capacitive mechanism design proposals submitted to energy ministers, said that every country developing a renewable electricity grid has market capacity and “it is very regrettable that it has taken so long” to bring them to Australia.

Schott told the Australian Energy Week conference on Thursday that while she had not seen the final proposal to be presented to ministers, she believed it could rule out money for coal but govern gas.

Keri Schott says one of her “deep regrets” is that it has taken so long to enter the capacity market in Australia.attributed to him:Oscar Coleman

It is expected that there will be two models between which ministers can choose.

Under one, the Australian Energy Market Operator (AEMO) will determine how much distributed energy is needed to support renewables across the power grid, and will contract to purchase that capacity from a set of generators. Electricity retailers will be required to bid for this capacity at auction, which will be used to fund needed power generation projects.

The other model is a market-based mechanism that excludes AEMO from the middleman role, whereby retailers have to purchase sufficient distributable capacity to support the generation of electricity they purchase from power generators.


Schott cautioned that the market mechanism is more complex, while AEMO is likely to be averse to risk with spare capacity and spend more money than is necessary to purchase spare capacity. .

Mark Collette, managing director of EnergyAustralia, said an orderly transition from coal was the “big challenge for the energy system,” and encouraged him that ministers were prioritizing ESB’s proposals.

“Providing the right investment signals for new capacity is essential to our energy transition,” he said. “An orderly retirement of coal generation is also essential – in time so that the new system is ready in advance.”

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