Home Asset Management Coal fired power in faster phase out under AEMO roadmap

Coal fired power in faster phase out under AEMO roadmap

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As much as 60% of Australia’s east coast coal powered energy generation is expected to be retired in the period up until 2030, with all of Victoria’s brown coal burning stations expected to close by 2032.

This faster than expected retiring of Australia’s coal powered fleet was one of the key forecasts in the official 30 year road map released in early July by the Australian Energy Market Operator (AEMO), which also calls for the urgent progression of five major transmission projects throughout Australia valued at $12.7 billion.

“All actionable projects should progress as urgently as possible,” the report says, as they would provide “valuable insurance” against the closure of coal-fired power stations.

AEMO’s Integrated System Plan (ISP) is the result of two years of consultation with 1500 industry stakeholders, and includes the prediction that many coal fired plants will shut down significantly earlier than current schedules suggest, driven to close by the falling costs and faster roll-out of renewables.

The five priority transmission projects are HumeLink, VNI West, Marinus Link, Sydney Ring and New England REZ Transmission Link, while there are a further seven transmission links currently under development. 

AEMO said that at net present values, $170 billion would need to be invested in generation, storage and networks by 2050, while also operating and maintaining these assets implied a total investment figure of $320 billion.

TransGrid projects

NSW company TransGrid is developing $7 billion of the $12.7 billion in priority projects, including the $3.3 billion HumeLink venture in southern NSW and the company’s $3 billion VNI West project to upgrade the Victoria-NSW interconnector.

HumeLink comprises around 360 kilometres of power lines throughout southern NSW to create a transmission “superhighway” up the east coast. The project would also connect Snowy 2.0 to the national grid.

There is some controversy, however, with opponents demanding the transmission lines be built underground, although this would blow out the planned completion date of July 2026.

The transmission corridor has been narrowed from 200 metres to 70 metres after discussions with landowners, but land is yet to be acquired for the project.

The new Commonwealth Government has said it will invest in HumeLink and other priority projects through the $20 billion “Rewiring the Nation” plan.

Battery of the Nation

AEMO also prioritises Tasmania’s Marinus Link project, which includes the “Battery of the Nation” pumped hydro proposal to use Tasmanian hydro electricity on the mainland. 

Marinus Link should be progressed “as urgently as possible,” according to AEMO.

The $3.8bn Marinus Link interconnector is a proposed 1500MWt electricity and telecommunications connection between Victoria and Tasmania, plus supporting transmission network developments in Tasmania’s North West.

Marinus Link involves approximately 255 kilometres of undersea High Voltage Direct Current (HVDC) cable, approximately 90 kilometres of underground HVDC cable and converter stations in Tasmania and Victoria.

Risks for South Australia

In South Australia, the State Government claims that AEMO is prioritising the eastern seaboard over the rest of Australia, with the 900 kilometre Project EnergyConnect linking SA and NSW likely to be delayed.

The project is now forecast to operate at full capacity from July 2026, rather than mid-2025 as previously planned.

“They’re subsidising $9 billion worth of renewable projects in NSW,” Energy Minister Tom Koutsantonis told the Adelaide Advertiser.

“All the investment, because of this interconnector, is not going in NSW, not SA. And what we get in return is all of our gas fired power stations shutting.”

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