Extending Liddell power plant’s life among worst options: regulator
Keeping AGL’s Liddell coal-fired plant going beyond its planned closure date was among the lowest-ranked options to avoid any shortfall in power, an electricity market regulator has found.
The study by the Australian Energy Market Operator formed part of the Morrison government’s controversial Liddell taskforce aimed at examining what if any new capacity was needed to avoid shortages when the 1680-megawatt Hunter Valley plant shuts in April 2023.
The regulator assessed a range of options, including keeping two of Liddell’s four units operating to 2026, additional transmission, and more pumped hydro such as the giant Snowy Hydro 2.0 project.
“Liddell’s current operations and its life-extension option were found to fall short of some 2025 system needs and represents one of the lowest replacement options,” its report found. With Snowy Hydro 2.0 not due to come on line until late in the decade, the best options were solar and batteries.
Dylan McConnell, an energy analyst at Melbourne University, said the findings were similar to modelling done for the taskforce by Frontier Economics. Both the regulator and the modelling report were posted online by the government in recent weeks, about a year after they were submitted.
“It’s not exactly a slam dunk for keeping Liddell open,” Dr McConnell said.A spokesman for federal Energy Minister Angus Taylor said the analysis showed Liddell “must be replaced by sufficient dispatchable capacity to keep prices low and the lights on”.
“It is incumbent upon the energy companies to step up and deliver the dispatchable capacity NSW needs,” he said, adding that “if industry does not step up to reach final investment decision on 1000MW of new dispatchable capacity by April 2021 then the government will step in”.
Dr McConnell said AGL had given the market more than seven years’ notice of its plans to shut down the half-century old plant.
That compared with about half a year’s warning given by Alinta when it announced it would close its Northern Power Station in South Australia in 2015 and Engie when it shut the Hazelwood power station in Victoria two years later.
An AGL spokeswoman said the future of energy “requires a combination of technologies and we will continue to lead investment in line with the market drivers of customer choice, technology and community needs”.
“We are continuing our closure and transition plans for Liddell, while at the same time progressing our investments in projects that transition our energy portfolio, with a focus on dispatchable and firming technology that deliver on our customers’ needs,” she said.