The future of NSW’s coal-fired power plants is under increasing threat from cheap renewable energy, which this week forced Victoria’s Yallourn coal plant to bring forward its closure date as analysts warn the end may come even sooner.
Analysts identified particular economic risk for Vales Point coal power near Newcastle, the same region where NSW Energy Minister Matt Kean will today announce a $70 million fund to grow a green hydrogen industry, which he said would bring jobs and growth to the region.
Goldman Sachs said Vales Point, backed by energy mogul Trevor St Baker, was facing “closure potential”. The power station’s end of technical life is set for 2029.
“With only an approximately seven-year operating life now remaining, and a very weak wholesale electricity forward curve, we believe Yallourn’s permanent exit may still be even earlier than now planned,” Goldman Sachs analyst Baden Moore said.
“In our view, the risk of accelerating coal generation closures is increasing as the market makes room for the rapid addition of renewable generation.”
EnergyAustralia announced on Wednesday its Yallourn coal plant would close in 2028, four years ahead of the previous deadline. Energy analysts said the renewables-led collapse in average prices across the nation’s electricity grid was so severe that the 1480-megawatt facility supplying up to 22 per cent of the state’s power could close even sooner than expected.