Wholesale electricity prices are sinking lower than it costs to buy coal.
Even the world’s top coal exporter is struggling to make money from burning the fuel.
Australia’s coal power plants, which make up more than half of the nation’s generation mix, are facing increased pressure as rooftop solar hollows out daytime demand. That could mean early closures amongst the country’s aging fleet, giving energy planners the tricky task of ensuring energy security whilst replacing the steady, predictable flow of power with more variable renewable generation.
A surge in new wind and solar capacity is driving wholesale electricity prices as low as $29 (A$40) per MWh in some parts of the network, in many cases lower than it costs the plant to buy its coal, Energy Security Board chair Kerry Schott said. Reduced demand because of coronavirus restrictions has also damped prices.
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