The world’s largest port for coal has announced that it will now be powered entirely with renewable energy.
Port of Newcastle made the announcement as coal power generation in Australia’s national electricity market declined to its lowest point in the last three months of 2021.
The port continues to export an average 165Mt per year of coal. However, this move is part of a plan decarbonising the business by 2040 and increasing the non-coal portion to ensure that coal makes up only half of its revenue by 2030.
It has reached a deal to purchase retail power from Iberdrola, the operator of the Bodangora windfarm in inland New South Wales. This agreement provides the port large-scale generation certificates that are linked to the windfarm.
Craig Carmody, chief executive of the Port of Newcastle, said that the Port of Newcastles title of the largest coal port of the world isnt quite as amazing as it once was. That change was necessary to avoid what happened to Newcastle and the closure of the steel industry.
Carmody stated, “I would rather be doing this now while our destiny is in our control, while we have revenue coming into the company, than in a crisis where our revenue has collapsed and nobody will lend us money.”
For coal shipped through our port, we get 84 cents per tonne. For every other product, we get $6-8. It’s easy to see where I would rather spend my money.
The port converted 97% of its vehicles into electric as part of its transition and is currently engaged in other infrastructure projects to reduce its carbon footprint.
Andrew Stock, a retired energy executive and climate councillor, was a founding member of Clean Energy Finance Corporation. He welcomed the development, but acknowledged that there was still much to do.
It is a good thing that they are considering it, but 50% income diversification before 2030 is still a decade off. Stock stated that this is still a large amount of coal that will be going through the port, even though the IEA/IPCC have made it clear they must move.
And that’s only half of the coal income for 2030.
Stock said that governments should encourage a rapid increase in the use of renewable energy similar to what has happened in South Australia, where 100% of its power comes from renewable energy.
Carmody said that it was an Port open to allAlthough the business could not refuse traffic, he believed that showing that the company was openly accepting change would encourage others to do so.
Carmody believes that in some ways, it doesn’t really matter what the policies of government, equities, or debt markets are. They make the decision for you. It doesn’t matter how Australia’s policy settings look, it matters what some investor in New York and Tokyo thinks.
We don’t really have a choice. Nobody wants to invest. [being part of the fossil fuel supply chain].
The announcement comes as Dylan McConnell (research fellow at the University of Melbournes Climate and Energy College) shows that renewable energy accounted for nearly a third of all electricity in the national electric market (NEM).
The coal’s share in the electricity grid declined 5.9% over the last three months of 2021 compared to 2020. Gas generated its lowest quarter since 2004.
The rooftop solar market grew 24%, and utility solar 26% over the same period. However, the wind share increased by only 6.4% compared with previous years. This was partly due in part to poor wind conditions, and a shortage of new capacity.
McConnell said that solar is extracting black coal at the highest level. It is evident in the changes to the generation profile.
McConnell stated that South Australia and Victoria had recorded average negative power prices for the quarter.
McConnell stated that it was a sign that they were experiencing negative prices on average. It is a sign that coal prices are dropping in the middle of each day.