Published in The Australian Financial Review.
Australia’s electricity system is being forced to navigate its future with one wary eye on policy influencers who are far more invested in nostalgia than in how our renewables-driven energy system is actually built, financed and operated.
According to this worldview, cheap power could be restored if Australia simply stopped listening to engineers, investors and grid operators, and instead returned to the comforting certainties of coal or leapt boldly into nuclear, as if capital markets, construction timelines and operating risks were mere cultural inconveniences.
When the electricity industry shows precisely zero interest in putting up its own money to build a new coal plant, this is waved away as evidence not of poor economics but of ideological capture. Apparently, global energy companies, super funds, utilities and banks have all succumbed to wokeness, while a small group of commentators alone can still see clearly.
There’s a collective amnesia by those who argue Origin Energy’s decision to extend the life of the already built and fully depreciated Eraring power station represents a death knell for renewables.
In reality, it represents almost the opposite.
Extending the life of a 40-year-old coal plant for a short period is a classic risk management decision in a system undergoing rapid change. It is not a vote of confidence in coal as the cheapest or best technology for the future. It is a stopgap, and everyone involved knows it.
If coal were genuinely the superior investment that clean energy critics claim, the response would be obvious. Investors would be lining up to build new coal stations. The $4 million spent in 2019 on a feasibility study for a new coal plant in Collinsville in Far North Queensland, by the Morrison Government, is a case in point. Seven years on, there is no coal-fired power station in Collinsville, with the only conclusion you can draw that the feasibility study showed what the government at the time already knew and that new coal is not feasible.
There is also an irony at the heart of the critique of renewables that is rarely acknowledged. Critics conveniently discount rooftop solar, batteries and demand side participation as imaginary supports, while simultaneously lamenting the rising cost of electricity in a system dominated by ageing coal plant failures.Jackie Trad Clean Energy Council Chief Executive
The real challenge is ensuring markets, rules and networks evolve fast enough to integrate them efficiently and honestly while maintaining reliability.
Globally, the energy industry is voting with its wallet, as are capital markets, including pension funds. Last year alone, the world added close to 150 gigawatts of wind power, and in just the first half of 2025, 380 gigawatts of solar capacity were added. At the same time, coal generation fell for the first time since 1973 in both China and India. It’s not difficult to understand why, when China installed enough wind and solar last May that could generate as much electricity as the entirety of Poland. They’re doing it because it’s cheap.
This is how capital allocates when technologies are cheaper to build, faster to deploy, modular, scalable and lower risk.
Recent opinion commentary by the Centre for Independent Studies this week stumbles on basic facts. Claims that the $6.5 billion sale of coal power station Loy Yang B is evidence of coal’s enduring value mask the truth of the matter. Alinta Energy did not sell a single coal plant for that sum. The entire Alinta Energy business was sold, including a large retail customer base and a substantial pipeline of renewable and battery projects.
In announcing the acquisition, buyer Sembcorp explicitly pointed to Australia’s renewable scale and growth prospects as the strategic prize. Coal was a legacy add-on, not the driver of the company’s value.
There is also an irony at the heart of the critique of renewables that is rarely acknowledged. Critics conveniently discount rooftop solar, batteries and demand side participation as imaginary supports, while simultaneously lamenting the rising cost of electricity in a system dominated by ageing coal plant failures.
Yet when coal units trip, which they do with increasing frequency, prices spike instantly. In the past year, around a quarter of coal capacity in NSW and Queensland has been unavailable at any given time. These outages hit household and business bills directly. By contrast, the most reliable new capacity in the system is already operating quietly on Australian rooftops.
When solar carried the system
During recent heatwaves, when demand surged past 40 gigawatts, coal was not carrying the system. Distributed solar did. Millions of small generators delivered power precisely when and where it was needed, reducing stress on networks and limiting price volatility. Add household and grid-scale batteries and the system becomes more flexible.
None of this means the transition is free, easy or without cost. It does mean that pretending the solution lies in reviving technologies investors have already rejected is a dead end.
Australia’s coal fleet is old, on average close to 40 years, and approaching the age at which such plants are typically retired worldwide. When these plants fail, nostalgia does not keep the lights on.
The real challenge is ensuring markets, rules and networks evolve fast enough to integrate them efficiently and honestly while maintaining reliability.
Extending Eraring for a short period may buy breathing space. It does not rewrite the economics of energy. And it certainly does not invalidate a transition that households, businesses and investors are already driving, panel by panel and battery by battery, regardless of how loudly its critics protest.
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