Australia’s AGL Announces Plans To Replace Liddell Power Station With 1.6 Gigawatts Of Renewables

December 11th, 2017 by Joshua S Hill

Australian energy company AGL has announced plans to close the 2 gigawatt coal-fired Liddell Power Station and replace it with at least 1.6 gigawatts of renewable energy, battery storage, and demand response.

Located in New South Wales, Liddell Power Station has been in operation since the early 70s, and was acquired by AGL Energy in September of 2014. Australia is currently embroiled in a massive debate over the value of continuing its reliance on coal for its electricity generation or transitioning to renewable energy sources. Australia’s government has long been backed by coal interests and as a result change has been slow in coming. Despite the massive renewable energy potential in a country such as Australia — which is literally surrounded by water for offshore wind and has some of the most impressive solar resources in the world — renewable energy has been an awkward proposition.

Change is slowly happening, however, thanks to state governments rather than the federal government, as well as the obvious business case for renewables swaying the minds of utilities and businesses.

It is unlikely that Australia has reached a tipping point just yet, when it comes to its transition to a low-carbon economy, one milestone that will one day be recorded as pushing the country toward its inevitable tipping point was announced on Saturday, when one of the country’s largest energy companies, AGL Energy, announced plans to close the 2 GW (gigawatt) coal-fired Liddell Power Station in eastern New South Wales, to be replaced by a mix of high-efficiency gas peakers, renewables, battery storage and demand response, alongside efficiency upgrades for the Bayswater Power Station and conversion of generators at Liddell into synchronous condensers.

“This plan demonstrates that old power plants can be replaced with a mixture of new, cleaner technology, while improving reliability and affordability,” said Graeme Hunt, Chairman of AGL. “Decisions for the investments are staged to enable flexibility to respond to the changing needs of the market and improvements in technology over the next five years.”

It will be interesting to see how critics of renewable energy in Australia respond to these plans when they are faced with AGL’s own estimates that show extending the life of the Liddell Power Station would be less affordable in the long run. Total capital investment for the Liddell replacement option would be around AUD$1,360 million compared to around $920 million for extending the life of the Station, but the Levelized Cost of Energy between the two options is significantly different.

The contrast between the two is even greater when you consider that the Liddell Life Extension project only extends the life of the Station by five years, compared to a lifespan for the Replacement Portfolio of between 15 to 30 years. AGL did consider selling the Liddell Power Station but determined that it would be more efficient to repurpose the site post-2022.











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