AGL chief Andy Vesey defends plans to shutter Liddell power plant in 2022

AGL’s CEO has made the case for the 2022 closure of its Liddell plant, saying it would help drive down energy prices.

AGL chief executive Andy Vesey has defended the company’s plan to shut its Liddell power plant, saying plans for the site after 2022 would help drive down energy prices.

Mr Vesey told a business and government audience in Sydney that converting the existing generators and adding battery and pumped hydro on the site at Lake Liddell would allow the development of more renewable energy sources across the market.

AGL (AGL) has been under pressure from the Federal Government to extend the life of the plant beyond it’s scheduled closure date of 2022, or to consider a sale, with three rival generators expressing interest in buying the 1,760 MW plant.

But Mr Vesey said Liddell was an “extremely valuable” part of AGL’s generation portfolio until 2022 and an important part of its plans.

Mr Vesey told the Committee for Economic Development of Australia that the company had made those plans in anticipation of the government completing its signature National Energy Guarantee policy. Its aims of directing investment into new capacity that met both reliability and emissions targets at affordable prices was “doable”.

The only way to drive down electricity prices was by adding more generation to the mix, Mr Vesey said.

The comments came as Glencore’s global coal chief Peter Freyberg said AGL Energy’s planned closure of the Liddell coal-fired power plant in the Hunter Valley would boost power prices in a similar way to that of the closure of the Hazelwood brown coal plant in Victoria last year.

Mr Freyberg said latest coal-fired power technology should be part of Australia’s future power generation.

“Electricity costs jumped last year when Victorian power generator Hazelwood was shut, and we shouldn’t be surprised when there is another electricity price jump if Liddell closes in a few years’ time,” Mr Freyberg, the mining and trading giants most senior local executive, told a lunch at the Hunter Valley coal festival.

Last week, the Australian Energy Regulator said the Hazelwood closure had been largely responsible for 2017’s doubling of power prices in NSW and Victoria.

“We need a national energy policy that delivers on price and delivers on reliability,” Mr Freyberg said.

“The reality is coal currently underpins energy security in Australia. If we are to sustain a strong economy going forward, we should factor in high efficiency, low emission coal into our future energy options.”

He said the National Energy Guarantee was a good first step and Glencore would look at the merits of the plan when the details became known.

More to come