Coal still produces most of Australia’s electricity, report finds

Federal Energy Minister Angus Taylor has rejected claims by the Clean Energy Council that Australia’s renewable investment has stalled due to a lack of national energy policy. Despite a new report to be released on Friday showing coal still accounted for 60 per cent of Australia’s electricity generation in 2018, Mr Taylor said Australia led the world when it came to investment in clean energy. Federal Energy Minister says there has been record investment in renewables. Alex Ellinghausen

“In 2018, Australia led the world in per capita investment in clean energy, investing the equivalent of the United Kingdom, France and Germany combined,” Mr Taylor said. “The Clean Energy Council is on the record saying renewables are price competitive and new subsidies aren’t needed. I stand by my comments – there is no lack of investment certainty.” The Australian Energy Update, to be released by the Department of Environment and Energy on Friday, confirmed the dominance of fossil fuels in electricity generation, accounting for 81 per cent in 2018, down from 83 per cent in 2017.

Coal made up 60 per cent, natural gas 19 per cent and oil 2 per cent.

The energy update found more than 75 per cent of electricity generation in Queensland, NSW and Victoria was coal-fired. Clean Energy Council chief executive Kane Thornton said while it was good news Australia had achieved its 2020 Renewable Energy Target early, investors were uncertain about what was going to replace it. It said new financial commitments for new renewable energy projects reached a high of over 4500 megawatts in 2018, but have collapsed to less than 800 megawatts in each of the first two quarters of 2019. But the Clean Energy Regulator confirmed to Mr Taylor’s office that committed renewable projects for 2019 so far were above the 2016 result of 1222 megawatts.

“The CEC is not doing themselves, or the industry it represents, any favours by talking down Australia’s record of investment in renewable energy,” Mr Taylor said. The CEC report said subsidies were no longer needed for large-scale wind and solar projects, but long-term policy certainty and regulatory reform was crucial to ending the investment freeze. Big business has also expressed dismay at the failure of the Commonwealth and state and territory governments to deliver a coherent energy policy. Mr Taylor’s office has disputed the claims that wholesale prices will rise because of stalled investment, saying average wholesale prices across South Australia, Victoria, NSW and Queensland for the months of July and August were about $20 per megawatt hour cheaper in 2019 compared to 2017.

The average future prices for 2021 are sitting at about $71 per megawatt hour – well below 2018-19 average prices and close to the Morrison government’s target of $70 per megawatt hour by 2021. The energy update report showed gas accounted for most of WA and the Northern Territory’s electricity generation, with WA responsible for half of Australia’s gas-fired generation in 2018. It also confirmed grid vulnerability in Victoria – which is aiming to reach a 50 per cent renewable energy target by 2030 – where electricity generation decreased by 10 per cent in 2017-18, due to the closure of the Hazelwood brown coal power station in 2017. Electricity generation from renewables continues to grow – doubling since 2009-10, and climbing to 19 per cent last year – the highest level since the mid-1970s, according to the energy update report. This was mostly due to hydro (7 per cent), wind (6 per cent) and solar (5 per cent). About 13 per cent of Australia’s electricity was generated by industry and households’ solar rooftop PVs. Renewables, mostly hydro, accounted for 42.7 per cent of Tasmania’s energy mix. Mr Taylor said the report showed the share of renewables in Australia would continue to grow over the next few years. “The challenge in the energy sector is integrating the renewables boom to deliver affordable and reliable power,” he said.

It comes as the big energy companies, major energy users and regulators called for a consistent national energy policy at a stakeholder energy meeting in Brisbane on Thursday.