Guest essay by Eric Worrall
Australia’s green conservatives are panicking that after years of political vilification, coal businesses are abandoning their plants, leaving a gaping hole in Australia’s baseload power reserves.
Guest essay by Eric Worrall
AGL digs in on coal plant closure as Turnbull government warns of ‘colossal failure’
Nicole Hasham James Massola
SEPTEMBER 6 2017 – 2:38PM
Energy giant AGL has issued a further snub to the Turnbull government, insisting it does not plan to sell its ageing Liddell power station nor keep it open beyond 2022.
In a statement to the Australian Stock Exchange on Wednesday, AGL said it was committed to closing the NSW coal-fired power station – Australia’s oldest operating coal plant – as planned.
But power company Delta Electricity has indicated it could be interested in buying the plant, subject to price and the cost of upgrading the station to keep it running.
Prime Minister Malcolm Turnbull on Wednesday said the government was still in talks with AGL over the future of Liddell and it was too early to say if the government would give financial incentives to a new owner of the plant.
A report from the nation’s energy market operator on Tuesday warned urgent action was needed to prevent blackouts on hot summer days. In response, Mr Turnbull said his government wanted to delay the closure of Liddell, in NSW’s Hunter Valley, for at least five years.
It is slated to close in 2022, which AGL says is the end of the plant’s operating life.
The AEMO report on Australia’s dispatchable power shortfall, which mentions the AGL Liddell plant by name;
The NEM is not delivering enough investment in flexible dispatchable resources to maintain the defined target level of supply reliability, as the transition from traditional generation to variable energy resources proceeds. This was vividly illustrated by the load-shedding events of February 2017 and by the Finkel Review analysis. Most stakeholders see changes to market rules as the most economically efficient way to remedy this deficiency. AEMO forecasts of NEM demand and published investment plans confirm the urgency of this task and short-term measures will be necessary until a long-term solution is agreed and becomes fully effective.
Liddell Power Station retirement: Prior to the retirement of Liddell (announced by AGL to occur in 2022), around 1,000 MW of new investment is expected to be required to preserve reliability of supply in New South Wales (NSW) and Victoria at the NEM standard. Mechanisms should be established in the NEM design to address this, and similar requirements, for the long term.
My impression is AGL simply don’t want to be the bad guys anymore. Thanks to massive government incentives, green energy is far more profitable than coal, so AGL appear to be running down their coal plants and abandoning them. The fact renewables are not a viable replacement for baseload power, the fact the risk of blackouts is skyrocketing, isn’t AGL’s problem; it is a problem for Australia’s overconfident politicians who thought coal plant operators would simply sit there and take the abuse, and the green pseudo-intellectuals who cheered on this political idiocy.