AGL Energy explores manufacturing solar panels after deal

AGL Energy is exploring manufacturing solar panels at the site of the recently closed Liddell coal power station.

AGL Energy CEO Damien Nicks. Picture: Britta Campion/The Australian

AGL Energy is exploring using the site which once housed one of NSW’s largest coal generators to manufacture solar panels after striking a deal with technology company SunDrive.

The company last year shuttered its Liddell coal power station, and it plans to repurpose it and the site for the Bayswater coal generator – scheduled to close no later than 2033 – into a renewable energy hub with zero emission generators and associated industries.

As Anthony Albanese pledged $1bn to build out Australia’s solar manufacturing capacity, AGL said it has entered into a preliminary agreement with SunDrive to explore establishing manufacturing plant at the site.

The two parties will now work to outline key infrastructure and engineering requirements and identify the regulatory approvals and licences necessary for the development, construction, and operation of a solar PV manufacturing facility located in the Hunter Energy Hub Advanced Manufacturing Precinct.

The agreement also includes an option for a possible offtake agreement where AGL purchases SunDrive’s solar panels for its customers.

Announcing the partnership alongside the prime minister, AGL chief executive Damien Nicks said the agreement has the potential to help create a new solar manufacturing industry in Australia.

“Our vision for the Hunter Energy Hub is to create a low carbon integrated energy hub – designed with circular economy principles – that brings together industries that can make a positive contribution to the energy transition, including renewable energy generation, grid-scale batteries, green advanced manufacturing, and associated industries,” Mr Nicks said.

The agreement – albeit preliminary – is a boost to the federal Labor’s plans to rapidly develop a solar industry in Australia. Despite Australia boasting the highest uptake of solar panels in the world – with one in three households installing panels – only 1 per cent of the panels were made in Australia.

Labor is hoping to accelerate Australia’s transition away from fossil fuels, and an increased deployment of rooftop solar will ease the burden of new generation capacity required.

Labor has set a target of having renewable energy generate more than 80 per cent of Australia’s power by the end of the decade.

But progress on deploying large-scale renewable energy generation has been sluggish amid pockets of local resistance and high inflation, and authorities hope rooftop solar can provide added impetus.

Still, there is some uncertainty about whether Australia can sustain its rapid rate of growth in rooftop solar. While many households have bolted on solar, a cost of living crisis means it is often only available to those with more financial means, and those households struggling remain exposed to recent soaring electricity prices.

An acceleration of rooftop solar would put more pressure on coal generators. Coal runs throughout the day, but with a rapid deployment of solar, coal generators are under sustained financial pressure as wholesale prices are often zero during sunny days.

Coal generators will recoup their losses during the evening when the sun has set, but an increase in batteries across Australia is beginning to undercut the last remaining profitable period.