September 19, 2017

In an article published on 19 September The Australian newspaper wrote EnergyAustralia "knocked back" support from Nationals MP Andrew Gee to expand the Mt Piper power station near Lithgow in New South Wales.

The story refers to correspondence between EnergyAustralia Managing Director Catherine Tanna and Mr Gee in March and April of 2017.

You can read our letter to Mr Gee here.

Long before Mr Gee wrote to us, EnergyAustralia had a clear position on coal investment in general and on the Mt Piper plant in particular.

Baseload coal generation is the foundation of Australia's energy system and will be for many years to come.

Today coal provides around 76% of total electricity output1 in the National Electricity Market. It is critical to underpinning the energy system as more renewables and new technologies like batteries are integrated into market supply. 

EnergyAustralia is studying new gas, battery, pumped hydro, demand response and other technologies and approaches. 

As part of a portfolio, all these things can provide reliable, cleaner energy and do it more cost-effectively than new coal, particularly at a time when demand for centralised power is increasingly for flexible generation and not base load supply. 

That's our view, but we know others think differently and that's fine.

But it's mindboggling to be asked about expansions to existing power stations or new coal projects when we have struggled to secure coal supply for the plant we already have at Mt Piper.

In the past, there were six mines able to supply coal to Mt Piper. Now it's one – the Springvale mine – and it's under threat of closing. 

Mt Piper is one of the newest and most efficient black-coal plants in New South Wales, with an operating life until 2042. It supplies up to 15% of New South Wales' energy demand and is critical to system reliability, especially during peak periods. 

Closing Mt Piper would have a drastic impact on energy system reliability and affordability, and some 600 direct and indirect jobs in and around Lithgow.

Mt Piper's uncertain coal supply is affecting the electricity market today. But with a secure source of fuel Mt Piper can move from rationing coal to more freely generating electricity, adding more supply which can only help ease the pressure on electricity prices.

We've invited the Prime Minister to Mt Piper so he can understand firsthand the difficulty involved in securing reliable service from existing coal plants and in securing coal supply.

We'd welcome support from Mr Gee and the government in addressing coal supply at Mt Piper.

Australian Energy Regulator State of the Energy Market May 2017, p. 29,