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Energy minister calls on AGL to commit to Liddell replacement plan

Federal Energy Minister Angus Taylor has called on AGL to commit to its energy replacement plan ahead of the planned closure of the Liddell power plant.

In 2017, former AGL chief executive Andy Vesey announced a three-phase plan to replace the 1680 megawatts lost when the NSW Hunter Valley-based Liddell plant closes in 2022. The announcement came after intense pressure from the government to keep the plant open or onsell it.

Mr Taylor said AGL should not allow an energy shortage to occur when Liddell closes.

“Given the closure of the plant is scheduled for 2022, replacement dispatchable generation is urgently required to ensure a seamless transition of capacity.

“The market is already facing significant supply pressures [as] evidenced in January this year through the load-shedding events in Victoria,” he said.

“Electricity is an essential service and Australia’s major electricity providers have an obligation to ensure all Australians are provided with affordable and 24/7 reliable access to this service.”

The Australian Energy Market Operator (AEMO) said the energy replacement was needed to avoid blackouts.

“When Liddell retires there is a significant potential for involuntary load-shedding during hot summer days, without additional investment in dispatchable resources,” AEMO chief executive Audrey Zibelman said.

AGL was approached for comment.

While Liddell’s shutdown was first flagged in 2015, the shock closure of Victoria’s Hazelwood power station in mid-2017 spurred the federal government in the following months to stop the next plant slated to close – Liddell – from exiting the grid.

The government gave AGL 90 days to either extend the plant’s life beyond 2022, sell it, or develop new power generation.

AGL said it would still close Liddell, but unveiled a $1.36 billion, three-phase plan to replace the 1680 megawatts lost after its shutdown.

The plans includes upgrading the nearby Bayswater power plant, and building 1600 megawatts of renewable generation and 250 megawatts of batteries over five years.
“This plan demonstrates that old power plants can be replaced with a mixture of new, cleaner technology while improving reliability and affordability,” AGL chairman Graeme Hunt said at the time.

While AGL committed to the first phase it has not yet committed to the second stage.

AGL has previously said it would not go ahead with phase three if other companies built new generation.

Grattan Institute energy director Tony Wood said it was up to the entire energy sector to fill the gap made by Liddell’s closure.

“It’s not up to AGL to replace Liddell, they don’t have the obligation or exclusive right to do it,” Mr Wood said.

To date, AGL has slated $200 million for an 100-megawatt upgrade of its Bayswater site and signed a 255-megawatt solar power offtake agreement with Chinese firm Maoneng’s solar farm.

It has pledged $400 million for a 252-megawatt gas-fired power plant to begin construction in 2021, ‘depending on government policy’.

The company also has plans for a $470 million, 250-megawatt pumped hydro power station in the Bells Mountain region, at a former coal mine north of Muswellbrook in the NSW Hunter Valley.

Source: Sydney Morning Herald