Submission to the Energy Security Board ’ s National Energy Guarantee Draft Design Consultation

The key threat to reliability and prices is the exit of coal plants at short notice. The risk of such exits has been demonstrated most recently through the Hazelwood closure in VIC where five months’ notice is all that was available. None of the key modellers (including AEMO) predicted it. If anything, the risk of sudden exit is rising as the coal plant fleet is ageing, the economics of coal plants is deteriorating and coal plants are increasingly load following, putting equipment under additional stress. Also, the effects of additional closures at short notice is likely to be more pronounced, at least in the short term, given the reduced capacity margins after the closure of the Hazelwood, Northern and Playford power stations.