Coal pays for the clean energy dream, like it or not - AFR

Coal-fired power stations are being kept online longer and running as backup capacity to support the grid as renewables expand. The article reports that coal plants are effectively subsidising the transition by providing firming and stability services that are not yet being paid for at full cost in the wholesale market.

Where this fits

This is a cost and reliability story. It shows that the real system cost of a renewables-heavy grid includes the retention and operation of dispatchable power plants that markets are not properly pricing. The transition is proceeding on the assumption that coal (or gas) will play an uncompensated or under-compensated firming role indefinitely. This masks the true all-in cost of renewables and defers the question of what replaces coal when it is finally retired.

What it means

Australia is building a system that depends on coal's willingness to run at a loss, buying time without solving the firming problem. When coal does retire, the grid will need something dispatchable and reliable to fill that role. Gas is expensive, dirty, and dependent on volatile commodity markets. Nuclear, which is lower-emission than wind or solar on a lifecycle basis and requires no coal or gas backup, is legally prohibited in Australia. The transition is affordable only because it is incomplete: it has not yet paid the bill for keeping the lights on when the wind does not blow.