FutureCoal, the global peak body representing major coal producers and related industries, has called for the Australian Government to pragmatically and realistically re-shape its pathway to net-zero following the Australian Energy Market Operator’s (AEMO) warning that the current strategy may not deliver energy security or climate objectives given the current state of alternative technologies.
AEMO’s 2026 Draft Integrated System Plan, published on Wednesday 10 December, confirmed that coal will be required to stabilise the grid until 2049, 12 years longer than previously forecast, and that transmission costs would need to double as renewable build-out accelerates, placing more pressure on household incomes and industrial competitiveness.
“The Australian Government can only ignore AEMO’s assessment to Australia’s detriment”, said Michelle Manook, Chief Executive of FutureCoal. “This report challenges the ideology of a ‘renewables-only’ transition, and it confirms that Australia’s current pathway is misaligned with engineering and cost realities, or the original intent of the Paris Agreement.”
Ms Manook reinforced her National Press Club address on 18 November 2025, noting that the Paris Agreement, signed in 2015 by 195 parties, including Australia, did not mandate a fossil-fuel phase-out but instead realistically allowed multiple technology pathways, including abated coal, to support national economic and energy-security needs while reducing emissions.
AEMO stops short of proposing new coal power stations, with its modelling continuing to rely on cost assumptions widely regarded as inflated, including an estimated AUS$11 000/kW for advanced ultra-supercritical black coal technology (still in development) fitted with CCS, producing electricity at AUS$217 – 342/MWh when modelled as a greenfield plant with no existing logistics or grid connection.
Further independent analysis presents a very different picture. Power market research by Gerard Holland and Gene Tunny (2025), together with Arche Energy’s long-run marginal cost modelling, shows new coal plants as more competitive, if not the cheapest. In this case, the scenario is a more realistic minemouth plant, which eliminates the vast expense of buying land and associated connections and logistics.
As such, the headlines comparing the costs of different power sources seem to contrast between AEMO’s pessimism and Holland and Tunny’s slightly more plausible realism whose cost findings are as follows:
- Ultra-supercritical (USC) hard coal (unabated minemouth): AUS$82/MWh
- CCS retrofitted onto existing coal: AUS$113/MWh
- New USC hard coal with CCS (minemouth): AUS$166/MWh
- Firmed renewables: AUS$145 – 236/MWh
- Pumped hydro (excluding charge energy): AUS$162/MWh
“New Coal Power should not be off the table. Based on these findings, abated coal commercially and environmentally qualifies to be part of the mix. It is competitive with the very technologies expected to replace it”, Ms Manook said. “The case for energy security supported by modern coal technology should not be dismissed.”
Ms Manook said major economies, including Japan, India, China, and the US, continue to invest in modern, and increasingly abated, coal solutions across the value chain because coal underpins steel, cement, fertilizers, chemicals, critical minerals, and advanced materials.
“Australia has been left behind, while other nations modernise their coal value chains to balance economic and energy security with emissions reductions and sustainability goals”, she said. “AEMO’s report is an opportunity for Australia to initiate a pragmatic course correction, recognising coal’s domestic and international role, which underpins nearly every aspect of modern life and continues to support the prosperity of this nation.”
“The words of the day are balance and inclusion. Climate policies need to reflect engineering reality, not ideology, otherwise Australians will continue to face rising costs, worsening reliability, and still fall short of climate targets.”