"AGL has said they want to get out."


The Australian Energy Review - - FRONT PAGE - EL­IZ­A­BETH FABRI

AUS­TRALIA’S largest power gen­er­a­tor AGL has con­firmed its “geri­atric” Lid­dell coal-fired power sta­tion in NSW will close in 2022, de­spite a push from the Fed­eral Govern­ment to de­lay the clo­sure to dodge a fore­cast 1000 megawatt (MW) short­fall in baseload power.

In early Septem­ber Prime Min­is­ter Mal­colm Turn­bull urged AGL to ei­ther com­mit to keep­ing 46-year-old Lid­dell project open for five years be­yond its planned clo­sure date, or sell the plant.

“We have had sev­eral dis­cus­sions with the chief ex­ec­u­tive of AGL Andy Ve­sey, about the pos­si­bil­ity of the Lid­dell power sta­tion con­tin­u­ing for a longer pe­riod - say up to five years - to pro­vide more se­cu­rity to the sys­tem over that pe­riod,” Mr Turn­bull said.

“AGL has said they want to get out, they want to close Lid­dell by 2022.

“Now, 2022 is a very crit­i­cal date. It's five years away, ob­vi­ously. It's also a year or two prior to Snowy Hy­dro 2.0 com­ing on.”

Ac­cord­ing to an Aus­tralian En­ergy Mar­ket Op­er­a­tor’s (AEMO) re­port re­leased last month, the clo­sure of Lid­dell in 2022 would “ma­te­ri­ally in­crease the risks of un­served en­ergy (USE) in NSW”, par­tic­u­larly from 2024-2025.

“As Lid­dell ap­proaches the end of its life in 2022, it will likely ex­pe­ri­ence more unan­tic­i­pated out­ages, which is why we will spend a fur­ther $159m to im­prove re­li­a­bil­ity at Lid­dell be­fore it closes.”

How­ever, AGL said it was com­mit­ted to the clo­sure of the sta­tion in 2022, in line with the ad­vanced no­tice it made in April 2015.

“The long no­tice pe­riod we have given re­flects our com­mit­ment to man­ag­ing car­bon risk,” AGL man­ag­ing direc­tor and chief ex­ec­u­tive An­drew Ve­sey said.

“Fol­low­ing our meet­ing with the Prime Min­is­ter, we have com­mit­ted to de­liver a plan in 90 days of the ac­tions AGL will take to avoid a mar­ket short­fall once the Lid­dell coal-fired power sta­tion re­tires in 2022.

“I was asked to take to the AGL Board the Govern­ment’s re­quest to con­tinue the op­er­a­tion of Lid­dell post 2022 for five years and/or sell Lid­dell, which I agreed to do.”

Since AGL ac­quired Lid­dell from the NSW Govern­ment in 2014, the com­pany has al­ready in­vested $123 mil­lion to im­prove the re­li­a­bil­ity of the plant, and will spend a fur­ther $159 mil­lion be­fore it closes.

At a press tour of the site late Septem­ber, AGL Mac­quarie general man­ager Kate Coates cited a Wor­leyPar­sons re­port com­mis­sioned by the NSW Govern­ment in 2013, which found ex­tend­ing the plant from 2022 to 2032 would cost a fur­ther $900 mil­lion.

“Lid­dell’s an old lady and you can’t ask an old lady to run a marathon a few days in a row with­out fall­ing over," Ms Coates told re­porters.

Ms Coates said about 840MW was cur­rently avail­able out of the 2000MW ca­pac­ity due to break downs and main­te­nance.

AGL’s chief econ­o­mist Tim Nel­son added it was very rare for power sta­tions to be used be­yond the 50 year mark.

“In­ter­na­tion­ally, only 1 per cent of power sta­tions in op­er­a­tion are older than 50 years,” Mr Nel­son said.

Im­age: AGL.

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