Q: Will electricity bills increase if energy companies continue to bring forward the date of closing their coal-fired plants?
A: This is a controversial question with no easy answer. As retail bills hit record highs this year as more renewables enter the grid, analysts say carefully managed and timely infrastructure deployment is needed to keep electricity prices low . The market will become more volatile if there is a lack of “distributable” power from batteries, pumped hydro or gas-fired power plants to support intermittent supply from renewables and prices will rise. But if the policy settings and investments are sufficient to provide the required back-up power, cheap renewables can smoothly replace more expensive coal and gas baseload power.
Mr Cannon-Brookes said the consortium “strongly believes this will result in lower bills for consumers”.
Prime Minister Scott Morrison is skeptical of the claims and has said coal plants should not close earlier than planned.
“We need to make sure our coal-fired power generation runs until it runs out, because if it doesn’t, electricity prices will go up. They don’t go down,” Mr Morrison said on Monday.
Q: How quickly does coal-fired electricity go out?
A: Australia’s Energy Market Operator (AEMO), which runs the electricity grid, said in December it expected coal-fired power stations to close much faster than expected.
He said it was likely the equivalent of NSW and Victoria’s combined fleet of coal-fired power stations would close in the next 10 years, with 60 per cent of Australia’s fossil fuel generation shut down from here 2030.
In the December quarter, renewables provided a record 35% of the average electricity on the grid. Coal still makes up the majority of the country’s electricity, but in the December quarter, black coal fell to its lowest seasonal share since 1998 and gas hit its lowest level since 2003.
The AEMO thinks it is likely that 60% of coal-fired electricity will end by 2030, with a complete phase-out of coal by 2043.
Q Is AGL’s recovery plan a good deal?
A: Mike Cannon-Brookes and Brookfield believe they can make money from this deal and create 10,000 jobs by building a green energy grid in the process.
Brookfield is a major shareholder in fossil fuel assets, but it sees the value in green technologies and has created a $10 billion fund to invest in clean energy.
Head of Transition Investment Mark Carney, who served as Governor of the Bank of England from 2013 to 2020, has been at the forefront of shifting thinking in global financial markets on the need to decarbonise the Mondial economy.
“I have long said that decarbonisation is the biggest economic opportunity facing Australia. But it takes vision and action,” Mr Cannon-Brookes said.
“We can finance this transition ourselves and we can build replacement capacity, which the government wants will create a lot more jobs.”
AGL has a massive customer base, 4 million strong across the country, owns extensive real estate holdings for its existing energy assets where the consortium could build new wind and solar farms and use the company’s infrastructure to connect new batteries to the network.