Blackout risk as AGL dithers on Liddell power replacement plan

SYDNEY could be plunged into blackout in less than five years if electricity giant AGL doesn’t implement its full plan to replace power lost when the Liddell coal plant shuts in 2022.

The Liddell station provides 10 per cent of the state’s power and is scheduled to shut in 2022.

SYDNEY could be plunged into blackout in less than five years if electricity giant AGL doesn’t implement its full plan to replace power lost when the Liddell coal plant shuts in 2022.

In analysis provided to the federal government, the Australian Energy Market Operator has raised concerns AGL is only committed to provide 100 megawatts, which is less than an eighth of what is needed to stop the threat of rolling blackouts during summer.

“Unless AGL or others invest in sufficient replacement resource capacity to serve NSW, there remains a significant resource gap of 850MW,” the March 16 letter reads.

Closing Liddell without a reliable back-up plan would undermine power stability, Mr Frydenberg has warned.

Minister for the Environment and Energy Josh Frydenberg.

The regulator also called for the National Energy Guarantee to be put in place and said if it was not operating by December it would move to work with the state government “to establish a mechanism to allow the replacement of Liddell to proceed”.

Energy Minister Josh Frydenberg said the advice “vindicates the Turnbull government’s concern about the proposed closure of AGL’s Liddell Power Station”.

“The existence of a major shortfall in dispatchable power following Liddell’s closure would clearly present an unacceptable situation undermining the stability of the system,” Mr Frydenberg said.

“It would be preferable for AGL to commit as soon as possible to the next stages of their plan.”

The Liddell station provides 10 per cent of the state’s power and is scheduled to shut in 2022 after AGL refused to keep it operating, instead outlining a plan to replace it with a mix of solar, gas, wind and battery technology.

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But it has only committed to an upgrade to nearby Bayswater coal power station.

“While AGL states that it will pursue the entirety of its plan, the Bayswater upgrade is the only committed resource at this point in accordance with the criteria AEMO applied for determining new supply,” the letter reads.

“AGL also notes that it will not pursue new investment identified in Stage 3 of the plan if other participants in the market invest in new resources.”

An AGL spokesman said “decisions for the investments are staged to enable flexibility to respond to the changing needs of the market and improvements in technology over the next five years”.

The closure of Victoria’s largest coal plant, Hazelwood, last year sent electricity prices in that state soaring and threatened blackouts.

But AGL has committed to moving away from coal power.