Australia is rebuilding its electricity system, replacing ageing coal power stations with wind, solar and batteries. Here’s how that shift works, and why new power lines have become the biggest hurdle.
Australia’s electricity system was built around large coal-fired power stations, close to coal mines, connected to cities by transmission lines.
That system is changing fast. Rooftop solar on millions of homes, along with large wind and solar farms, now supply a growing share of power. Renewables provide around 40% of the electricity in the National Electricity Market, the grid connecting Queensland, New South Wales, the ACT, Victoria, South Australia and Tasmania, and at times more than three-quarters.
The Federal Government’s target is for 82% of electricity in that grid to come from renewables by 2030, although many analysts expect it to fall short.
Why coal is closing
Australia’s coal power stations are ageing, and many are becoming unreliable and expensive to maintain. Owners have announced closure dates for most of them over the next 15 years, partly because cheap solar during the day makes them less profitable.
The weather problem
Solar only generates during the day, and wind varies with the weather. So a renewable grid needs ways to store energy and fill the gaps, known as firming.
Options include large batteries, which can respond in a fraction of a second, pumped hydro, which pumps water uphill when power is cheap and releases it through turbines when needed, and gas-fired power stations, which can switch on quickly.
Snowy 2.0, a huge pumped hydro project in New South Wales, has been delayed by years and its cost has blown out from an original estimate of $2 billion to more than $12 billion.
The transmission bottleneck
The best places for wind and solar farms are often far from existing power lines. That’s why governments have planned thousands of kilometres of new high-voltage transmission lines, such as HumeLink and VNI West, linking new renewable energy zones to the grid, and Marinus Link, connecting Tasmania to Victoria.
Most major projects are running behind schedule, some by several years, because of shortages of equipment and workers, lengthy approvals, rising costs and opposition from farmers and communities along the routes.
What it means for bills
Supporters say renewables are the cheapest source of new electricity, and that a modern grid will lower prices over time.
Critics argue the cost of new transmission, storage and backup, which consumers pay for through their bills, is higher than promised, and that closing coal too fast risks blackouts.
The Australian Energy Market Operator, which runs the grid, publishes regular plans for the transition and warnings about reliability risks if new projects aren’t built on time.
