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Wind, batteries in AGL's Liddell exit plan


AGL Energy appears to be standing by its decision to close NSW’s ageing Liddell coal-fired power station, telling shareholders extending the life of Liddell would cost too much money, and that the bulk of the power lost through shutting the plant could be made up using wind power.

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AGL chief executive Andy Vesey told the energy company’s annual general meeting this morning AGL had been assessing options to replace Liddell since April 2015, and is committed to present its plans to the Prime Minister and national energy market operator AEMO by early December this year.

He said AGL is confident that the plans will address supply and capacity concerns raised over the Liddell closure and result in the development of new, reliable and low-emissions energy supply.

“We are designing our plan to mitigate the impact of Liddell’s closure,” Vesey told shareholders at the meeting in Melbourne today.

He said the bulk of energy lost from the forecast closure of Liddell in 2022 can come from wind power plants to be built in NSW and Queensland.

An upgrade of Liddell’s neighbouring Bayswater plant, new gas-fired power plants and battery storage would make up the balance of capacity in a plan Vesey said will be presented to the federal government in December.

“It will address the 8 terawatt hours a year of energy that Liddell provides and the 1,000 megawatt reserve capacity shortfall AEMO has highlighted,” he said.

Vesey reaffirmed AGL’s intention to move away from coal-fired generation.

“In the interests of reliability, affordability and meeting our obligations to reduce carbon emissions, we must begin the processs of renewal now,” he said, adding that the Liddell site could be repurposed with gas-fired power or battery storage and no-one had more to lose from failing to mitigate the market impact of Liddell’s closure than AGL.

Vesey said AGL’s commitment to exit coal does not hide from the fact that coal currently represents 86 per cent of AGL’s electricity generation and is likely to remain an integral part of AGL’s business for several decades.

The Turnbull Government has been pressuring AGL to keep Liddell open beyond its scheduled 2022 shutdown or sell it to a new operator in order to shore up electricity supply.

AGL chairman Jerry Maycock told the AGM that while it may be “technically possible” to extend the life of the 45-year-old plant the costs “are certain to be substantial” and selling it would be “challenging”.

Maycock said the NSW Government, which owned Liddell before AGL bought it in 2014, had intended to close Liddell in 2022.


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