AGL’s Vesey rules out clean coal technology

AGL’s chief is weighing a new combined cycle gas capacity in SA, but says clean coal is too expensive and polluting.

Mr Vesey said clean coal technology such as that advocated by Prime Minister Turnbull was expensive and more polluting than new combined-cycle power plants. Picture: Roy VanDerVegt.

AGL Energy has ruled out building clean coal technology to improve electricity supply security, but has confirmed it is considering new combined cycle gas capacity at Torrens Island in South Australia in the wake of another black out.

Chief executive Andy Vesey said South Australia was also being considered as the site for a new liquified natural gas import facility that AGL wants to build to address short supply of the electricity generation fuel.

Mr Vesey said the state needed a comprehensive plan to address a growing number of power failures given its high reliance on intermittent energy sources - principally wind - and its location at the far end of the national electricity market.

Neither an energy intensity scheme such as that advocated by chief scientist Alan Finkel but scotched by Energy Minister Josh Frydenberg, nor a second interconnector linking coal fired power from NSW into the SA grid would “necessarily” be enough to address the problems.

Mr Vesey said the state needed new “in-region” supply to improve the reliability of electricity in the state, but reiterated his opposition to building new coal-fired capacity.

AGL’s 2015 greenhouse policy committed the country’s biggest electricity retailer to not build any new coal fired capacity and to phase out existing plants by 2015.

“We are absolutely bound by the commitment to the greenhouse gas policy’’.

Mr Vesey said clean coal technology such as that advocated by Prime Minister Turnbull was expensive and more polluting than new combined-cycle power plants such as the one AGL has proposed to build in South Australia.

AGL, which owns the Loy Yang brown coal electricity station in Victoria and the Macquarie black coal-fired plant in NSW, reported a $325m profit for the half year to December as higher wholesale electricity prices and cost reductions helped offset falling margins caused by the rise in the gas price.