‘Bittersweet day’ as Liddell coal plant shuts down for good

AGL Energy’s Liddell coal plant will shut for good on Friday, the first of several major fossil fuel power stations scheduled to close this decade.

AGL Energy will shut down its Liddell coal plant in NSW’s Hunter Valley on Friday after 52 years of operations, one of a string of major fossil fuel power stations set to shut this decade amid a swift switch to solar, wind and batteries generation.

The closure of Liddell was described as a “bittersweet day” by AGL electrical tradesman Jackson Channon, with over half the site’s staff transferring to the adjacent Bayswater plant and some choosing to retire.

“My grandfather drove one of the trucks when they were building Liddell, and my parents worked here – this place has meant a lot to my family, and for the people who work here, it’s like a community of mates,” Mr Channon said. “It’s a bittersweet day for many of us, but I’m looking forward to the new challenge when I move over to Bayswater.”

AGL first flagged the closure of Liddell in 2016 and its decision to retire the plant triggered a storm of political protest, with then Prime Minister Malcolm Turnbull vowing to keep it open after the rapid exit of the Hazelwood coal facility in Victoria sparked market ructions and higher prices.

The long-planned closure has sparked concern in some quarters over the supply outlook for the broader system.

Liddell produced 10 per cent of NSW grid demand in the last year but this has fallen to 5-6 per cent at times of peak ­demand.

NSW Energy Minister Penny Sharpe said earlier in April she expected no “immediate impact” from the decision to switch off Liddell.

AGL itself also said it expected no “reliability” problems within the system.

The power giant‘s largest shareholder, Mike Cannon-Brookes, has vowed to reimagine AGL as a greener electricity generator, with its two remaining coal plants at Bayswater and Loy Yang in Victoria to close by 2035.

“We already have plans under way to build a 500MW grid-scale battery on the site, a feasibility study into a hydrogen facility is under way, and we are also exploring options with potential partners in industries such as solar, wind, and waste-to-energy,” AGL chief executive Damien Nicks said.

“The closure of Liddell and the repurposing of the site as an industrial renewable energy hub is an example of AGL’s climate transition plan in action – it will reduce AGL’s emissions by around eight million tonnes per year – the equivalent of approximately 5 per cent of emissions from Australia’s electricity sector in 2021.”

With the closure of Liddell, the focus has switched to whether Origin Energy’s Eraring plant will close as soon as August 2025.

The NSW government is expected to hold talks with Origin over the option of keeping the Eraring power station open past its scheduled close date.

The coal-fired plant accounts for 25 per cent of the state’s electricity needs.

A further crunch point may await if not enough renewables are built to replace the outgoing coal stations.

NSW Premier Chris Minns has acknowledged that the government might have to buy back Eraring, saying taxpayers have been “fleeced” by its sale.

An alternative being privately discussed by senior Labor figures involves offering financial ­assistance to Origin if market conditions dip below an agreed point.