"AGL has said they want to get out."
LIDDELL COAL PLANT
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.