The local chief executive of the French-owned energy group that set the ball rolling on coal power closures in Australia says the country is on track to miss its 2030 climate targets and pursuing them at all costs will only drive up expenses for families and industry.
Rik De Buyserie, the new head of Engie in Australia, said there needed to be a more realistic public debate on the “enormous” task of the transition to low-carbon energy here, adding that those arguing that renewable power was cheaper were ignoring the huge investment required in transmission.
Engie Australia CEO Rik De Buyserie says the transition task is ‘enormous’. Eamon Gallagher
“Australia has huge ambitions – which, I think, is good – but the sheer volume of it I can’t see that happening before 2030,” Mr De Buyserie told The Australian Financial Review, pointing to the need for 10,000km of new transmission, 44 GW of new renewables and 15 GW of firming capacity this decade to meet the 43 per cent emissions reduction target.
“I would not suggest to lower the ambition – that’s definitely not the aim – but we need to get our ducks in a row to get there, because we’re not organised, Australia as a whole is not set up to reach it successfully.”
The comments come after the head of the Australian Energy Market Operator, Daniel Westerman, warned earlier this week that investment in new generation and transmission is not happening fast enough to replace closing coal power and foreshadowed that coal plants would close even faster than envisaged, making investment more urgent.
Engie, partly owned by the French government, closed its large Hazelwood coal plant in Victoria with only five months’ notice in 2017, triggering a sustained spike in wholesale power prices that hit consumers hard and heightened nervousness about the impact of future generator shutdowns.
Now Mr De Buyserie says coal plant closures slated for 2030 and beyond may well need to be delayed given the difficulty in building replacement generation and transmission in time.
Given the notice needed to keep a coal plant open, he recommended a thorough examination of whether each plant could be closed at its targeted date, working backwards to assess when the renewables and transmission needed to replace it would be available.
That would require decisions by 2025 or 2026 whether closures slated for 2030 could go ahead without the lights going out.
“It has to be looked on as very honestly and seriously,” he said. “Because you can’t just shut them down and hope the energy is going to come from somewhere else.”
The comments clash with calls from green power advocates, including AGL Energy’s biggest shareholder Mike Cannon-Brookes’ Grok Ventures also on Wednesday, that coal power closures should be further accelerated.
“That’s fine for the climate, that’s a positive,” Mr De Buyserie said of the push to shut thermal generators faster. “What not going to go down well is if that puts in danger the reliability and availability of your electricity.”
Asked about the targeted closure of Origin Energy’s 2880MW Eraring coal power plant in August 2025, Mr De Buyserie said he would be more concerned about later closures from 2030 when there were fewer alternative generating sources but that “if we seriously already are worried about a plant that’s scheduled to close in 2025, then we’re not in good place”.
Brett Redman, the chief executive of TransGrid, on Tuesday recommended a delay in the closure of Eraring, the country’s biggest power station, to provide “insurance” for a power system struggling to bring online cleaner generation to replace it. TransGrid operates the NSW transmission grid.
Mr De Buyserie pointed to several factors slowing the addition of replacement generation, including community opposition to new renewables and transmission infrastructure, regulatory approvals and delays in grid connections.
He also criticised the “demonisation” of existing technologies such as gas and coal power as “rather unhelpful”, saying there was no denying the amount of energy and capacity they provide into the system.
The executive, who ran Engie’s business in Peru before moving to Australia, pointed in particular to the collapse last year of the capacity mechanism recommended by the now-dissolved Energy Security Board, which was torn up by state energy ministers because it may have provided support for gas and coal power.
“For me, that was the strangest thing I struggled with,” Mr De Buyserie said of the changes made to Australia’s capacity system design, which he said contrasted starkly with the system in Peru where capacity payments are only available to proven technologies that can produce in the peak demand hours of 6pm to 11pm, so primarily gas, coal and hydro.
“So that was super-weird to see a capacity scheme that gives capacity payments to technologies that can’t give capacity,” he said, making an exception for the payments to batteries under the scheme.
“Okay, you could call it something else ... but you can’t pay capacity for something that doesn’t have capacity. That’s a strange thing.”
Engie's new local boss says Australia will fail its 2030 climate goals - The Australian Financial Review
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