Australia's inability to decommission its coal-fired power plants has turned out to be its biggest stumbling block in renewable energy development, according to GlobalData, a leading data and analytics company on Monday.
According to GlobalData's report, as of 2017, coal dominated the Australian power mix, with a share of 37.7 percent of the total installed capacity, followed by natural gas with 28.7 percent.
GlobalData's latest report, Australia Power Market Outlook to 2030, Update 2018 – Market Trends, Regulations, and Competitive Landscape, shows that Australia has substantial coal reserves, which account for the dominance of this fuel in the power generation mix.
"The country’s coal reserves, which have higher thermal efficiency due to lower sulfur content, represent around 14 percent of the world’s black coal resources," according to the report.
Additionally, the country has 29 percent of the world’s uranium resources and almost 1.9 percent of its gas resources.
Chiradeep Chatterjee, a power industry analyst at GlobalData, commented on Australia's biggest obstacle to boost renewable energy.
"Australia has vast unused renewable potential and aims to generate 23.5 percent of its energy – equivalent to 33 terawatt-hours– from renewable sources by 2020, in accordance with the extended Mandatory Renewable Energy Target," Chatterjee stated.
In the report, it stated that Australia still has to move away from coal as its renewable energy target mandates generating more than 20 percent of its supply from renewable energy sources by 2020.
"The most pressing challenge in this direction is that coal-fired power plants have not been phased out at the pace originally planned in the energy policy, leading to surplus generation capacity and low wholesale prices. This can possibly slow down the fast growth of renewable technologies," according to the report.
"The government will therefore have to create a policy environment that will expedite the decommissioning of coal-fired power plants, thus setting the way for a smooth development of renewables," Chatterjee concluded.
By Gulsen Cagatay