AGL Energy, who has Australia’s largest energy portfolio, is pushing the country toward a renewable future. They’re looking to cut coal-based generation from 77 percent down to at least 50 percent by 2030. In order for this to be feasible, the company is hoping that the government will avoid supporting future investments in coal-fired power plants.
Barnaby Joyce, Australia’s Deputy Prime Minister, still wants the country to take advantage of coal and believes a future without it is unrealistic. Earlier this month, he wants the Australian government to still be an equity partner in the fossil fuel. He argues that it’s still a reliable power and lenders will hand out money if the government doesn’t go completely against it before 2020.
However, lenders have been facing lots of pressure to give money for development of any more of these types of power plants. Bloomberg reports that Westpac Banking Corporation isn’t funding a large coal-mining project in Queensland and has now placed tougher restrictions for those that are looking to fund fossil fuel-based electricity generation.
Prime Minister Malcolm Turnbull has faced scrutiny on the topic. He stated that Australia’s goals are not created “by ideology and politics” and pointed toward South Australia’s wind farm as an example. Tesla will be building 100 megawatts worth of battery storage to store excess energy produced in the area. It’s part of the ongoing rebuilding project after devastating storms took down power in the area last summer.
Both Joyce and Turnbull see the addition of storage systems for renewable energy as a negative. However, Turnbull has also expressed that it’s up to the market to decide after the “Finkel review” was recently released. Chief Scientist Alan Finkel advised that Australia should set a clean energy target of 28 percent reduction on emissions instead of the much larger 60 percent proposed, and Turnbull believed there was nothing in the review that says more coal-fired power plants can’t be built.
AGL believes that the government needs to cut ties with coal and put renewable energy at the forefront. Company CEO Andy Vesey told Bloomberg in an interview that the writing's on the wall and the market isn’t going to support these fossil fuels: “The danger is you convince yourself that you see coal in your future and therefore if it doesn’t happen and the markets don’t deliver it, the government may step in and do it. The industry is not going to invest in things that don’t make sense.”
Vesey goes on to explain that the government’s push toward renewables needs to adopt a clean energy target so they can avoid a large gap between old coal plants retiring and the creation of sustainable sources. There’s arguments that a rapid switch to renewable could bolster power prices, which Fiskel warns about in his report. Ultimately, a clean target will be set for Australia, but the debate rages on has to how soon that will happen and how much coal is involved.