After years of setbacks, bad news and mounting obstacles, Australia's coal-fired generators must have felt they had something to celebrate.
Throughout its history, coal-fired power had been considered the quintessential provider of so-called base-load electricity. And while coal plants – despite the orthodox thinking – could in fact reduce their output to minimise their exposure to those low or negative prices, they were only able to lower production so much.
"The presumption was that when you turned them off you then had to let them cool down and start them up fairly gradually. These times are most obvious in the middle of the day when solar output is highest, particularly in autumn and spring, when relatively mild weather means demand for power can be subdued."Assuming they do get confidence … the minimum generation level of coal could theoretically fall all the way to zero."But mere days after AGL's announcement of the good news, another Australian coal-fired generator painted a bleaker, arguably truer, picture for the industry.
To cover periods where a company like Delta might sell power at a loss and incur any debts, the Australian Energy Market Operator requires generators to provide credit support in the form of a bank guarantee. "It has been identified during the refinancing process that 13 of the 15 lenders declined due to constraints, which included the Big-4 Australian banks.
Czech group Sev.en reportedly spent more than $200 million on Vales Point in 2022 when they bought it off businessmen Trevor St Baker and Brian Flannery, who famously paid just $1 million for the asset in 2015. "It's exacerbated in Delta's case because they are very unashamedly totally pro-coal," Mr Leitch said."So it makes it very hard for anyone who is under pressure themselves about climate change goals – which the banks all are – to continue supporting a business that refuses to even acknowledge the reality of it."In the short term, Mr Leitch said Delta was likely to win a reprieve and be given the rule change it was after.
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