Australia’s Coal State Faces Backlash for Hindering Transition

f1g4jqlg]utf3r}k(y6wxe6p_media_dl_1.png Bloomberg

Article content

(Bloomberg) — The decision by Australia’s Queensland to extend the life of its coal-fired power fleet could chill investment in renewable projects needed to meet ambitious national climate targets, according to energy ministers from other states.

Article content

Queensland’s Liberal National Party-led government earlier this month announced an energy roadmap that included plans to keep its coal plants online until the end of their technical life, undoing a pledge by the previous Labor administration to end generation using the fuel by 2035. The state’s energy minister defended the policy from strong criticism by his counterparts from Labor-run Victoria, New South Wales and Western Australia during a panel discussion at The Australian Financial Review Energy & Climate Summit in Sydney on Tuesday.

Article content

Article content

Article content

Clarity on when Australia’s coal fleet will close is key to encouraging funding for renewables and giving confidence to new investors, said Lily D’Ambrosio, Victoria’s minister for energy and resources.

Article content

Article content

“If you take away that date certainty around coal and just allow the market to run its course, then we’re not going to see the transition in the time that we need to see it,” said Amber-Jade Sanderson, Western Australia’s minister for energy and decarbonisation. “If we continue to run coal indefinitely, the taxpayers are on the hook for billions and billions of dollars.” 

Article content

Queensland Treasurer and Minister for Energy David Janetzki said at the conference that the plan was pragmatic and served the region’s unique position of having a state-owned coal fleet. On Tuesday, Janetzki also announced the state’s first new gas-fired power plant in more than a decade, after his government ditched a multibillion-dollar pumped hydro project that was meant to support renewable generation in November.

Article content

Australia has national goals to reduce emissions between 62% and 70% from 2005 levels by 2035 and for 82% renewable energy penetration by 2030, more than double current levels. Even under Queensland’s outgoing plan to close all state-owned coal plants by 2035, Australia would achieve just 62% renewable penetration by 2030, according to BloombergNEF modeling. 

Article content

Queensland ships about one-eighth of the world’s coal — exporting A$45.8 billion ($29.8 billion) of the fuel in the year through May and earning A$5.5 billion of royalties in the financial year through June. It is one of Australia’s most coal-dependent states — generating 65% of its electricity needs in 2024 from the fuel, according to BNEF. 

Article content