The world’s largest coal port, Port of Newcastle in Australia, is set to be powered by 100% renewable energy. The announcement is part of the Port of Newcastle’s targets of decarbonising by 2040 and having coal only make up half of its revenue by the end 2030. This decision is made following the major coal power hit that the Australian electricity market experienced at the end of last year. A Power Purchase Agreement (PPA) has been signed with Iberdrola to generate the wind power needed for the port’s operations. Iberdrola operates the Bodangora wind farm near Dubbo in inland New South Wales and provides the port with large-scale generation certificates linked to the wind farm.
The port currently continues to export an average of 165MT of coal a year. With this move, the plan is to increase the non-coal portion of its business so that coal only makes up half its revenue by 2030. Chief executive officer Craig Carmody said the Port of Newcastle’s title as the largest coal port in the world “isn’t as wonderful as it used to be” and that change was necessary to avoid what happened in Newcastle and the steel industry closed. He further added that he would prefer to be doing this now while they have control over their destiny, while enough revenue is coming in rather than face a crisis where the revenue has collapsed, and no one will lend. “We get 84 cents (45 pence) a tonne for coal shipped through our port. We get between $6 (£3.20) and $8 (£4.27) for every other product. You can see where I’d rather have my money.”
In the last three months of 2021, coal’s share of the electricity grid fell 5.9% when compared to the same period in 2020, while gas recorded its lowest quarter of generation since 2004. Roughly over the same period, rooftop solar grew 24% and utility solar by 26% – though wind’s share only grew by a “quite modest” 6.4% compared to previous years. This was partly due to poor wind conditions and a lack of new capacity. The announcement comes as figures from Dylan McConnell, a research fellow at the University of Melbourne’s Climate and Energy College, shows renewable energy provided nearly a third of all electricity produced in the national electricity market (NEM).
“At the high level, solar is squeezing out coal, particularly black coal,” McConnell said. “You can see it quite clearly in the shape of what’s happened to the profile of generation,” McConnell said that Victoria and South Australia recorded average negative power prices in the middle for the entire quarter. “It’s a sign of the times that we’re getting negative prices on average. Coal’s being hollowed out in the middle of the day and that’s also what’s affecting their bottom line as well, as that’s when you’re having negative prices quite consistently,” he further discussed.
Apart from this move, the Port of Newcastle has also taken the step of having 97% of its vehicles converted to electrical vehicles (EVs). As a part of the transition process, the port has converted 97% of its vehicles and is now engaged in other infrastructure projects to decarbonise its operations.