Energy companies need shot of imagination | Editorial

It’s mind boggling that today, amid the growing march to renewables, that two gas fired power stations in this area are under review.

Energy Australia and AGL are taking a second look at their Brayton and Dalton projects given what they say is rising demand for electricity and soaring prices. Both were put on hold some five years ago “due to market conditions.” In reality, renewables were filling the void.

These peaking plants are designed as stop gaps. Energy Australia executive Mark Collette says gas fired generation has a role to play “providing stability as we integrate more renewable energy into the system.” The company is developing battery storage and supports wind and solar projects in eastern Australia. We believe their efforts would be much better directed in these areas.

Blackouts in South Australia and the closure of coal-fired power plants have no doubt emboldened their cause. But it is misguided. Technology is coming along in leaps and bounds and soon, gas plants will be old hat. Earlier this year even Hume MP Angus Taylor questioned the need for Dalton’s plant. 

”In the last year we have the utilisation of gas generators falling to 15 per cent, which represents massive under-utilisation and a sharp fall from previous years,” he said.

“Given such low utilisation, it is hard to see why a new generator is necessary, and why the local community should have to be distracted by this extension. Instead, we need to focus on increasing the utilisation of our existing gas generators to contain upward pressure on prices.”

It’s telling that on the one hand we have a major company proposing a massive solar farm at Gunning, sufficient to power 150,000 to 200,000 homes, and on the other, two corporates pursuing peaking stations that may never be needed.

Clearly Energy Australia doesn’t have the confidence to blaze a new trail. Its logic that more gas supply will drive down prices is also questionable. This week, ANU specialist Hugh Saddler told the Sydney Morning Herald that analysis showed wholesale electricity prices were lower when wind generation was highest. Put another way, gas used to augment supply at peak demand was driving prices up, not renewable sources.

Both AGL and Energy Australia should fully justify the need for these projects, otherwise communities will suffer. The State Government should also develop spine when it comes to energy policy.