AUSTRALIA NEEDS COAL

BLOOMBERG - June 7, 2022 - Australia needs to focus on increasing power generation from its existing coal fleet to protect customers from price increases as the nation grapples with an energy squeeze, according to Origin Energy Ltd.

“We have entered a period of incredible change and volatility,” Chief Executive Officer Frank Calabria said in a copy of a speech delivered to the Australian Energy Week in Melbourne. “The long-term energy transition that was already underway and accelerating has collided with a major shift in the broader macroeconomic and geopolitical environment, causing acute price and security of supply events in global energy markets.”

Australia, which still gets more than half of its electricity from coal plants, is struggling to ensure supply after outages at several facilities, including Origin’s Eraring plant. That led to increased needs for natural gas and spikes in short-term prices, resulting in the regulator capping them. The situation closely resembles recent events in the UK, where energy price volatility is pushing households into energy poverty and sending businesses to the wall, Calabria said.

In order for less polluting energy sources to succeed, government and industry must first work together to restore as much coal supply as possible to dampen wholesale power prices, Calabria said. Once that has been done, work must be done to support the rapid buildout of renewables, including construction of new transmission and back-up supply including batteries and pumped hydro, he said.

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