‘We need a tangible proof point’: Panel warns delayed coal retirements are suppressing renewables investment in Australia

The session, titled “Coal’s endgame: Timing, risk and what comes next,” was chaired by William Churchill, chief policy and impact officer at the Clean Energy Council.

He was joined by Louisa Kinnear, chief executive of the Australian Energy Council, Angela Catt, executive general manager of corporate affairs at Tilt Renewables, Danny Nielsen, senior vice president and country manager ANZ at Vestas, and Guy Lynch, vice president of manufacturing wind at GE Vernova.

Kinnear opened by describing the scale of what the transition demands.

“With this transition, we’re effectively replacing an entire system, and we’re not replacing that system with one single technology. We’re replacing it with very, very different technologies interacting with each other over periods of time, all with different lifespans and uses,” she said.

“We will be one of the only countries, one of a few countries in the world, to transition almost completely off baseload within the next 20 years and not have an interconnector into somewhere else that may have those supplies.”

The scale of that task is laid out in AEMO’s 2026 Integrated System Plan, which PV Tech reported calls for nearly 120GW of utility-scale wind and solar by 2050, approximately five times the current installed level. Under the plan’s optimal development path, most of the NEM’s remaining coal fleet would withdraw by 2038, with all coal exiting by 2049.

Kinnear identified three conditions that needed to be met for coal to exit on a sound basis: the right investment signals for firmed renewables, stronger signals for flexible supply including gas and long-duration energy storage (LDES) and sufficient essential system services.

“The one that is certainly worrying my members the most at the moment is even if we can get the replacement capacity for coal in the next few years, there may still be a challenge around how system services are procured, and whether there’ll be sufficient system services in place to allow some of those retiring coal plants to exit in a timely manner,” she said.

Catt described the current market dynamic in concrete terms.

“We are building the replacement market, the replacement system, before the current system retires and comes out. I really think about that as going up the stairs and down the elevator,” she said.

“We’re adding new renewable energy generation, new firming capacity step by step until we get high enough that a large generator can come out of the system. But then what that actually creates is some unusual market signals, and we can all see that at the moment with some of the wholesale prices and the level that they’re sitting at today.”

She said Tilt Renewables had three wind projects supported by the Capacity Investment Scheme (CIS) currently under construction and pointed to a common thread.

“They went through the CIS process while they were at the same time negotiating power purchase agreements (PPAs). They had a very clear understanding of the project’s economics, so they knew the required capex. They knew the financing required, and then they were genuinely bid-ready,” she said.

The scheme has already demonstrated results at scale. CIS Tender 4 awarded 6.6GW of renewables across 20 projects, with 12 of those projects featuring battery storage providing a combined 3.5GW/11.4GWh of energy storage capacity to support grid stability as coal retires.

Catt also called for faster and more frequent auctions to align the scheme’s cadence more closely with when projects are genuinely ready to proceed.

The shift toward solar-plus-storage as the dominant investment model reflects broader structural changes in project economics across the NEM. Indeed, Australia’s utility-scale solar sector has moved decisively toward hybrid configurations as standalone solar struggles with suppressed midday prices and grid constraints, with storage integration now central to how developers build the revenue case for new projects.

Supply chain fatigue

Nielsen said shifting coal retirement dates was creating compounding costs that extended well beyond turbine procurement.

“When the forward curves move down, then everything gets delayed, and that kind of causes problems,” he said.

“We probably have five or six jobs that are being quoted, being planned, and when you then have pre-working of cranes, when you have pre-working of transport, when you have civil contractors, electrical contractors, they also get tired of re-quoting, pushing schedules, re-planning because every time it’s an investment into that project that they have to carry.”

He said the turbine itself was becoming a smaller part of the total project cost.

“All the surroundings are probably 70% of the cost on a project, and that is generally done by local partners. Think of it: on a project today, a transport schedule is easily a year, with thousands of truckloads that need to come through. It’s a logistic master plan, and the more overlap in projects you get, the harder that master plan gets.”

Lynch drew on the US transition experience, in which coal-to-gas switching accounted for around 60% of CO2 reductions in the electricity sector between 2010 and 2025, with wind contributing just over 20%.

He said Australia’s indecision on exiting coal was compounding the problem at a moment when global competition for capital and equipment was intensifying.

“By extending coal and not having a clear policy on when we exit it, it’s not actually reducing the amount of cost in the medium term; it’s going to increase,” he said.

On wind specifically, Lynch said capacity was available in the global market but warned that Australia’s appetite for unproven turbine technology was adding unnecessary risk.

“A lot of the artificial price suppression that we see across different markets is forcing us into this nameplate game, where everyone wants something that’s not yet deployed, not yet validated, and yet they want to deploy it at scale,” he said.

He also directly raised the wind industry’s safety record.

“You don’t buy the right to be in industry if you continue to put people at risk on a daily basis, and the quality performance of the industry really has been immature, where we’ve thrown technology at the market with an expectation that we’ll figure it out as we go.”

Proof points, transparency and bipartisanship

When the panel was asked what would restore market confidence in announced coal retirement dates, Catt was specific.

“We need a tangible proof point that the next coal power station that is set to retire, retires, and it retires on time,” she said.

“Yallourn could be that perfect example. It was given well over five years ago, they announced the retirement timing, they gave seven years’ notice, and what we’re seeing is actually the right signposts on the way.”

She referenced a March 2025 confirmation from AEMO, the Victorian government and EnergyAustralia that no extension talks were underway.

“If we can have this demonstration that EnergyAustralia announced Yallourn’s retirement seven years ago, we’re seeing the signposts, and then that actually happens, that is something we can make a bet on, and that is certainty.”

Kinnear said system security transparency was the missing piece.

“My brush would be the next step, is, okay, well, now we’ve got a lot of capacity, so now we need to make system security much more transparent, quantifiable, valuable, and we can incentivise more participants to enter that market,” she said.

Lynch called for a more detailed plan behind the aspirational targets.

“It’s fine to have aspirational targets. We should not shy away from those because I think they do drive change. But having a more detailed plan behind it that actually shows a more sophisticated path versus just this binary argument, and that we can then get everybody bought into and around and on board with executing, would be very helpful,” he said.

He added a note that extended beyond the technology debate.

“In Australia, one thing we lack is a broader conversation about what energy security looks like. When you have remote-controlled assets connected to your grid, you really need to think about where those assets are controlled from and who has the keys.”

Nielsen said he was sceptical about near-term bipartisan alignment, but confident the transition would ultimately proceed.

“The bipartisan support will actually happen when the transition is so far down the line that everyone can see this is the obvious choice, and then everyone will go behind it and say, ‘Well, we’ve told you all along this is the way we go.’ That’s normally how it happens.”

He echoed comments made earlier in the day by Admiral Chris Barrie, who had called on the clean energy industry to advocate beyond its own project pipeline.

“It’s all about taking control over our own destiny in Australia. We need to have a resilient energy system that can withstand the climate change that is happening, and it’s only going to get worse, but also the energy security part of it. The world is getting even more volatile as we speak, and it’s important that we have that resilience in the system in Australia going forward.”