If coal is to Australian politics as pipelines are to Canada’s, the head of the country’s largest coal-fueled energy company has just done the equivalent of pipeline giants Enbridge or TransCanada swearing off petroleum.
AGL Energy Chair Andy Vesey has defied his national government to declare that all future baseload power on his company’s books is likely to be renewable—not coal.
Prime Minister Malcolm Turnbull continues to flout expert opinion to champion coal- and natural gas-fired generating plants, characterizing them as reliable “continuous power sources” to supply baseload power to Australia’s grids. But Vesey, whose company is the biggest owner of coal-fired power stations in the country, told an energy conference last week that he and his AGL colleagues strongly disagree.
“What’s the new baseload for us?” Vesey asked rhetorically. “It’s going to be large-scale renewables. It’ll be firmed up by probably open-cycle gas and, eventually, when [the cost of] storage comes down, that’s what it will be. We don’t see anything baseload other than renewables.”
Two reasons for his confidence: technology and innovation. “You’ll hear people tell you how coal can compete,” Vesey said. “But all you need to think about is economies of scale. Solar plants, the more you make, the cheaper they get. Wind turbines, the same thing.”
Coal plants, by contrast, are one-off, “bespoke” projects, sharply limiting opportunities to achieve economies of scale in construction, or to test innovative new iterations. As a result, Vesey said, “prices of large-scale generating plants haven’t moved in over 20 years.”