Australia’s ‘energy future’ is suddenly upon us: Origin, AGL

Australia’s two largest power suppliers, AGL and Origin Energy, are being forced to confront accelerating changes sweeping the market as the nation’s transition to renewables is declared the fastest in the world and new technologies reshape customer demands.

“The predicted ‘energy future’ we have been preparing for ... is no longer in the future,” said Jon Briskin, head of retail at power giant Origin. “It’s here and now.”

n Australia, coal and gas are still the dominant sources of the power mix, with renewables accounting for less than 30 per cent. However, after 3.3 gigawatts of new wind and solar power capacity were plugged into the nation’s main grid during 2020, the Australian Energy Market Operator (AEMO) has described the pace of change as “staggering” and believes it is feasible for renewables to make up more than 90 per cent as early as the mid-2030s if the trajectory continues.

“When you look at the numbers, this is nothing but absolutely staggering,” AEMO chief system design officer Alex Wonhas said. “Australia is undergoing the fastest transition of any energy system in the world.”

The influx of cheap renewable energy has been piling pressure on the nation’s traditional power generators by driving daytime wholesale electricity prices down to levels where many coal-fired operations are expected to be cash-negative. This year, EnergyAustralia brought forward the closure of Victoria’s Yallourn coal plant to 2028, four years ahead of schedule. There are predictions across the industry that further coal closures may follow.

“I wouldn’t be surprised if we see more of that,” Dr Wonhas said.