There are (at least) 4 Lenses, through which to view Coal Closure

In conjunction with the article ‘Green shoots of pragmatism at the CEC’s Clean Energy Investor Forum’  I’m publishing this brief article separately, as my suspicion is that we might be referring back to on occasions in future.

It’s a pretty simple idea … but (at the same time) one that it seems we all struggle, from time to time, to remain cognisant of all 4 lenses (by which to assess coal closure) simultaneously.

Different people view this challenge through different lenses

The way I see it, there are at least these 4 lenses that need to be viewed together to understand the complexities relating to coal closure.

Lens #1 = about Climate Change

With respect to concerns about climate change (and let’s, for a start, assume commitment across the world to decarbonization) this is where we get to the quest to close coal-fired power in the NEM in the shortest possible timeframe.

It’s been a while since I have heard the Greens talking about closing all coal by 2030, but I’m sure those on the left end of the Emotion-o-meter will have this lens as their primary prism.

Lens #2 = about Technical End-of-Life

It was with respect to Remnant Life of long-life assets that I went overseas a couple decades ago on my own E.S. Cornwall Memorial Scholarship, so this is an area where I used to have more focused experience.  But that was long ago now!

Most readers will have heard of the use of the ‘Grandfather’s Axe’ story as an analogy of progressive replacement of worn-out components in a power station:

(a)  that’s fine, up to a point, but is overly simplistic in dealing with high-cost long-life components (like a boiler drum, steam turbines, generator and the like).

(b)  if they were to need replacing (excepting ‘special cases’ like Callide C4, for instance) then the economics would coincide to dictate that it was not worth replacing.

Lens #3 = about Economic End-of-Life

It’s not necessarily the same as Lens 2:

(a)  indeed, it might be the economics that drives some decisions to close stations sooner than the remaining ‘technical’ life might dictate, all else being equal.

(b)  however both Lens 2 and Lens 3 clearly interact in various ways … such as via cash crunch starving assets of needed maintenance, accelerating technical decline – such as discussed in this article on September 2014).

Lens #4 = when the services they provide are no longer required

Here on this site (and in reports like GenInsights21 and the GRC2018 before that) we’ve written much about the arrival of the schism between ‘Anytime/Anywhere Energy’ and ‘Keeping the Lights on Services’ – with:

(a)  coal historically having been a big supplier of both services in a bundle; but

(b)  with the need for the ‘Anytime/Anywhere Energy’ from coal perhaps declining more quickly than the decline in requirement for ‘Keeping the Lights on Services’ (which leads to challenges to economics (Lens 3) and hence into sustaining maintenance (Lens 2)).

It’s through this lens that we understand such developments as:

(a)  the (ultimately unavoidable) decision in May 2024 to prolong the life of Eraring Power Station, and

(b)  comments (such as at the CEC’s CEIF) that ‘Coal Keeper was a silly campaign … it was about keeping the lights on!’ that were controversial in some quarters, but more understandable when viewed through this lens.

Other Lenses?

Can any of our readers identify any others that should be listed here?

Does anyone successfully remain cognisant of all 4 Lenses?

That’s more of an open question …