AGL says keeping Liddell power station open beyond 2022 could cost $900m
Keeping the Liddell coal-fired power station open beyond 2022, as Malcolm Turnbull has urged, could cost more than $900m, AGL says, with representatives of the energy company saying the station should be shut.
In a tour for journalists, in which AGL spoke about the problems facing the ageing power station, the company revealed an independent study conducted in 2013 estimated it would cost $900m to extend its life until 2032.
Kate Coates, the general manager of Liddell power station, said that figure was in addition to another $150m AGL was investing in the plant, just to get it to last until 2022. She said that figure was calculated in 2013 dollars, which would now be about $950m, adjusted for inflation.
Coates said the report was commissioned by the NSW government when the station was in public hands and it was conducted by the energy consultants WorleyParsons. She said the report was not very detailed and was just a “desktop study”.
“We sort of sanity checked that and it sounds about right,” Coates said.
AGL was not able to provide the report and the Guardian has
approached the New South Wales government for a copy.
An earlier report in the Australian suggested an engineering study said the power station could be extended to 2032, arguing that would save consumers money. But that report did not describe the cost of doing so.
In response to a report by the Australian Energy Market Operator calling for “new approaches” to securing Australia’s energy supply, Turnbull announced he was seeking to extend the life of Liddell power station – the country’s oldest operating large coal power station.
AGL has insisted it will not extend the life of the plant but its chief executive, Andy Vesey, reluctantly agreed to take Turnbull’s proposal to the board for consideration.
In a press tour of Liddell on Tuesday, Coates also outlined a long list of problems that beset the plant, describing an overall picture of a plant that was due for retirement.
At present, two of the four generators at Liddell are not operational, with one undergoing planned maintenance and the other one offline due to “stability issues” that have not yet been diagnosed.
Coates said she did not think the plant should be extended beyond 2022 and also said she did not think new coal power stations made sense.
AGL’s chief economist, Tim Nelson, said it was very rare for power stations to be used beyond 50 years and noted that there was 4000MW of renewable generation in the pipeline, which could make up for the lost energy from Liddell.
He said that, as the energy system evolved, coal would play a smaller and smaller part in the energy mix, as it was replaced by renewables and firming capacity provided by gas, hydro and batteries.
Coates said Vesey had given a lot of certainty to staff at the plant and that giving seven years notice about the closure left a lot of time for plans to be made about retirement, retraining or redeployment.
“Many of them had committed their entire careers to this power station and to see it close is a stressful thing in itself. But at least we had certainty,” Coates said. “They no longer feel that certainty.”