AGL Energy is planning its very own big battery, considering a 250MW battery storage facility at the Liddell coal plant in the Hunter Valley as part of a suite of investments designed to replace the capacity and output of the ageing generator that is due to close in 2022.

The plan – yet to be finalised – was unveiled at the company’s annual general on Wednesday by CEO Andy Vesey, and came after chairman Jerry Maycock voiced his support for Vesey and outlined the reasons why trying to keep Liddell open for five more years was a bad idea.

AGL has come under huge pressure from the Coalition government and the conservative media to keep Liddell open, despite warning that it would become increasingly expensive to operate and increasingly unreliable. Maycock said it made sense to invest in new technologies.

Vesey’s outline of AGL’s line of thinking was centred around the 250MW of battery storage and 100MW of “demand response” – including tapping into the household batteries of consumers – which he said could provide 150MW of “firm capacity”.

“We will deploy both grid-scale batteries, as well as residential batteries combined with orchestration technology to enable customers to participate in and benefit financially from demand response,” he said.

Such a battery storage installation – it did not give any details of how many hours of storage – would be the biggest in Australia, although it seems certain that once the Tesla big battery is completed in South Australia then other major projects will follow.

AGL is also half way through its first virtual power plant – linking household storage via smart software to deliver a “virtual” power plant equivalent to 5MW of solar power. It appears to be thinking along the same lines to help replace Liddell.

Other firm capacity would come from an upgrade of the neighbouring Bayswater coal generator – due to close in 2035 – which could add 100MW, as well as investment in new gas capacity (750MW) to help meet the 1,000MW of reserve capacity shortfall identified by the Australian Energy Market Operator.

But most of the 8 terawatt hours that Liddell curently produces – much of it at night when the need is less – will be replaced by new renewable energy projects, because they are the cheapest options.