How to replace the energy from Yallourn

Between Victoria’s Renewable Energy Target and the Solar homes program there is already a lot of momentum behind clean energy. Victoria is on track to easily beat our clean energy target 40 percent by 2025.

But more needs to happen, so we commissioned leading energy analysts Reputex to model how Victoria could replace the output of Yallourn power station by 2023.

The Reputex analysis shows we can get all the clean energy and storage we need to replace Yallourn by 2023 from projects already proposed, along with solutions like demand management and ‘virtual power plants’ and improving grid connections between Victoria and NSW.

By building the large-scale wind and solar, transmission upgrades and battery storage outlined in this analysis, together with continuing the roll-out of the Solar Homes program, we could retire Yallourn in just three years, lower prices, make our grid more reliable and create jobs.

Victoria’s old coal power stations are the most unreliable in the country, Yallourn alone has broken down 33 times in 18 months.

This is a significant risk to Victoria’s energy security, particularly over hot summer months when demand is high and coal generators are more vulnerable to failing in the heat.

The good news is that upgrading our grid and building more modern clean energy to replace Yallourn will improve reliability, as noted in the report from Reputex:

“Victoria is shown to more readily maintain energy reliability during typical ‘one-in-two year’ maximum demand events through the end of the decade.” Reputex p.19

Preparation is the key to avoiding price spikes when a coal power station closes.

By making immediate investments to replace Yallourn wholesale prices would fall faster than current trends and help avoid a price spike at the moment of closure, like those seen when Hazelwood power station closed at short notice in 2017.

Source Reputex p.21: Scaling up clean energy with storage and modernising our grid means prices fall faster under the “replace Yallourn” scenario. There’s only a minor and short-lived blip in prices at the moment Yallourn is modelled to close in 2023, then the downward trend resumes.

In the past, grids were built around a small number of large, centralised power stations. But now, modern electricity grids are a mixture of variable (sun and wind) and dispatchable power, distributed throughout the network.

“Dispatchable” means energy sources that can quickly ramp up and down on demand, like pumped hydro, batteries or solar thermal.

An additional solution is something called ‘demand response’. This means energy users are paid to reduce their consumption at times of extremely high demand.

Demand response is typically a cheaper alternative to building new power supply that might only be needed for a few hours during a heatwave, and sit idle the rest of the time.

Transmission infrastructure is another important piece of the puzzle. Connections between states allow clean energy to be imported or exported depending on where in the country it is sunny or windy.

The Reputex report specifically mentions the proposed Kerang interconnector with NSW. This would facilitate sharing of renewable energy supply during high wind periods, and incentivise further development of Victoria’s renewable resources.

We have the technology and the skills to shift to 100% clean energy. What we don’t have is the policy certainty and long term planning from government.

The Victorian government has a simple choice: build replacement supply now to prepare for Yallourn’s inevitable closure and reduce risk to the energy system, or be hit with price spikes and the risk of blackouts when the decision comes out of a boardroom in Hong Kong.

As we saw with Hazelwood, big energy corporations will get out when it suits them and with little warning. So planning for the closure of power stations needs to include a plan for the community.

By working together and setting clear plans quickly we can also support communities moving away from coal power to unlock new economic opportunities.