Aerial shot of the Stanwell power station, with cooling and smoke stacks and car park.

Draft plan would see coal and gas-fired power plants paid to offer stable supply

A draft plan for a new “capacity mechanism”, aimed at ensuring the stability of the national power grid, could see coal and gas producers paid for a reliable electricity supply.

The federal government’s Energy Security Board (ESB) was tasked with designing the new mechanism, which would pay producers through an auction process for the capacity they can provide.

Currently, generators in the National Electricity Market – which serves the East Coast and South Australia – are only paid for the electricity they produce.

The new system would also pay for generators to be available when needed.

The ESB said the introduction of such a tool by mid-2025 was going to be vital to ensure that much more capacity enters the network in the coming decades and a smooth transition to net zero emissions. by 2050.

There have been calls for the new mechanism to exclude existing generatorsespecially coal and gas.

But the council argued it was important the mechanism could access a mix of technologies and discourage the early exit of existing generators before new generators – like more renewables – were ready to take their place.

Job , updated

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