States Should Use Their Power to Manage Coal’s Orderly Exit

Australia Institute

The Australia Institute has welcomed the Energy Security Board’s (ESB) advice that state Energy Ministers be encouraged to step in and manage the orderly retirement of coal fired power stations in the National Electricity Market (NEM).

The proposal to use ‘Orderly Exit Management Contracts’ was made in the ESB’s post 2025 Market Design options paper and is the preferable regulatory route to securing stability of supply as coal is phased out of the NEM, the Australia Institute says.

“It is time for the states to step in and take control of the failing coal generators in the national grid. This is a common sense, low cost and practical solution that would guarantee reliability while facilitating the transition to clean, dependable, renewable energy of the future,” said Dan Cass, Energy Policy & Regulatory Lead at The Australia Institute.

“Coal power stations have been letting Australia down on multiple fronts. They are unreliable, under-regulated and refusing to act in the national interest.

“Coal will soon be making its inevitable exit from the National Electricity Market and that final step needs to be properly managed to guarantee the best outcomes for the Australian community.

“Orderly Exit Management Contracts will allow the states to solve the energy trilemma of reliability, cost and reducing carbon pollution in the most efficient way possible.

“This is the ultimate insurance policy for state Energy Ministers. It allows them to proceed with building out renewable energy capacity without fear that new supply will undermine the profitability of coal power stations.”

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