AGL grants Liddell reprieve to keep lights on
Angus Taylor notes “more to be done” as he welcomes AGL’s decision to delay coal plant’s closure.
The federal government will push AGL Energy to keep its Liddell coal plant open for longer after describing the move to delay its closure as a good interim step.
AGL has added an extra year to the planned retirement of Liddell in NSW and will push back the closure of two gas turbines in South Australia to avoid supply shortfalls in the national power grid over summer months.
The Coalition has been pressuring the energy company to keep the power plant open or sell it to an operator that is willing to continue running it.
Energy Minister Angus Taylor said the government’s position on Liddell had “not changed” despite AGL’s decision to delay its closure.
“We remain in constructive dialogue with AGL about this, and this is a good short-term announcement,” he said. “But there is more to be done. We want to see existing coal and gas generation stay in the market, running at full tilt.”
Three of AGL’s four Liddell units will now close in April 2023 rather than 2022, to support the peak summer demand period and reduce the chance of electricity shortages as the power system gradually shifts from coal towards a supply mix led by renewables and gas.
However, one Liddell unit will shut in April 2022, stripping about 500 megawatts of the facility’s total 2000MW capacity.
“In both cases, AGL has told the Australian Energy Market Operator it has been able to confirm a schedule that will help the national energy market cope with the critical summer months,” AGL said, noting the decision was made following an independent engineering assessment.
Former AGL boss Andy Vesey engaged in a bitter brawl last year with Malcolm Turnbull after he demanded the company either extend the life of the 50-year-old plant beyond its 2022 closure or make it available for others to buy.
Treasurer Josh Frydenberg also weighed in while energy minister. New AGL chief Brett Redman has worked to nurture a more conciliatory tone with Mr Taylor.
The mothballing of ageing gas units at its Torrens Island plant in South Australia will also be put back after AGL had previously outlined a plan to shutter two of the four units by November this year.
The move reflects the tight market after an outage at one of the four units at AGL’s Loy Yang A coal plant in Victoria and to ensure the smooth start-up of its Barker Inlet gas station due to open in November next to the Torrens units.
AGL will seek permission from the South Australian government to now stagger the retirement timeline, with the first two Torrens A units to close by September next year, a third unit in September 2021 and the final unit in September 2022. The loss of AGL’s Loy Yang unit and congestion issues bringing renewables into the system have underlined issues about the ability of the grid to cope during high demand, highlighted in late January when Victoria had rolling outages during a heatwave.
The lost output from three ageing coal plants, including Loy Yang A, and a major gas generator during one of the tightest supply-demand periods of the summer underlined the fragility of the grid, despite vast volumes of renewables boosting output over the past few years.