The announcement that EnergyAustralia’s Yallourn power station in Victoria is to close in 2028, two to four years earlier than had been expected, is an inevitable outcome of the subsidies that governments provide to wind and solar. Yallourn supplies one-fifth of Victoria’s electricity and about eight per cent of that in the National Electricity Market.  

The rapid expansion of wind and solar – all of which is subsidised – has seen their market share lift from virtually nothing 20 years ago, to over 20 per cent.  Because it is subsidised and receives payment even when (as is increasingly the case) wholesale prices are negative, renewable energy normally has priority over coal.  This further disadvantages coal generators by forcing them to operate in a...