Port Augusta a sign of things to come: AEC

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Alinta Energy’s Port Augusta plant closure is an example of how coal-fired power stations are being rendered uneconomic by renewables, the energy industry has commented.

Australian Energy Council chief executive Matthew Warren said the shutdown is the latest step in an “accidental experiment” occurring in South Australia, one that comes with risks and costs.

“South Australia has become a global test case for what happens when around 41 per cent of electricity generation comes from intermittent sources like wind and solar, displacing older, 24/7, high emissions power stations,” Mr Warren said.

“Although renewables penetration in South Australia is the product of both state and Federal Government decisions, policymakers did not plan to have such a high level of integration concentrated in one region of the grid so quickly.”

Acknowledging wind and solar technologies do not work in the same way as conventional power stations, Mr Warren said industry will not witness like-for-like replacement.

“Modern electricity grids still need to have enough energy to meet highly fluctuating demand throughout each day and each year, and to be able to manage a stable and safe power quality as all of these fluctuations occur,” he said.

“The closure of Northern means South Australia is now more reliant on fewer sources for these important functions – namely its remaining fossil fuel generators and the interconnector to Victoria. We are also seeing higher baseload prices into the future as you would expect when one of the major suppliers exits the market.

“Integrating renewables safely and reliably into the grid is an important technical challenge that we must solve if we are to decarbonise our energy systems.”