“The offer significantly undervalues future cash flows to AGL of operating Liddell power station until 2022 and the repurposing of the site thereafter,” AGL said. AGL declined to say what a fair value for Liddell would be. Alinta disagreed, saying the bid was a compelling market offer. Alinta 'disappointed' “We are disappointed AGL has turned down our offer for Liddell given we believe the offer was commercially compelling," an Alinta spokesman told Fairfax Media. Loading Replay Replay video Play video Play video

"We also believe that a sale would have allowed us to continue to drive down the cost of electricity for NSW customers and extend the reliability of NSW’s electricity supply. We will now move on and progress other opportunities to acquire low-cost generation sources in order to provide affordable and reliable energy to our customers.” Environment and Energy Minister Josh Frydenberg said AGL’s decision was "disappointing" given the sale would have benefited consumers and was backed by some of Australia’s largest manufacturers. Mr Frydenberg said AGL’s chief executive, Andy Vesey, first raised the prospect of Liddell’s sale in a meeting with Prime Minister Malcolm Turnbull and other ministers last year. He said Australian Competition and Consumer Commission head Rod Sims had previously said an Alinta acquisition of Liddell would benefit competition and lower prices. Mr Frydenberg said the Australian Energy Market Operator had also raised concerns about the closure of Liddell, given it supplies around 10 per cent of NSW's state’s power.

He said AGL had financially committed only to a fraction of the projects in its replacement plan and called on the company to "financially commit to all other stages" of the plan. The Australian Energy Market Commission declined to comment on commercial matters. AEMO also declined to comment,but has previously warned of uncertainty around AGL’s promise to replace all the power lost when it closes Liddell in 2022 but said the National Energy Guarantee - a policy created by the federal government to reform the electricity sector - could encourage other players to replace it instead of pushing AGL to commit to new generation, erasing the risk of Liddell's closure. 'This is BS': Joyce Mr Joyce slammed the AGL decision, saying closing coal-fired power stations reduced electricity supply, which drove up prices.

“Everyone out there in regional Australia is talking about what’s happening to the price of power and how it's taking away the dignity in their life because they can’t afford to pay the power bill,” he said. Former Nationals leader Barnaby Joyce says AGL is taking the Australian people 'for a ride'. Credit:Alex Ellinghausen "We need to grab AGL, cart 'em back in and say this is BS, you're taking us for a ride, you think we're fools and the Australian people are not. And they are not going to pay for your market manipulation, which is what's coming next.” AGL said it would replace the power lost by closing Liddell with other sources including high-efficiency gas, renewables, battery storage and demand response. In its statement on Monday, AGL said AEMO had confirmed that plan “will address the capacity shortfall”. 'Against the national interest': Abbott

Mr Abbott described AGL’s rejection of Alinta’s offer as “a strike against the national interest by a big business”. “The government should compulsorily acquire this power station for the price Alinta was prepared to pay, then they should sell it to Alinta and they can operate it,” he said. Tony Abbott described AGL’s rejection of Alinta’s offer as “a strike against the national interest by a big business”. Credit:AAP “That way we keep Liddell open and we don’t have the government running a power station because Alinta has put its hand up and said ‘we’ll do it’.” Mr Abbott accused AGL of wanting to close Liddell to increase the value of its other coal-fired power assets.

Loading “It means they can make up the slack with subsidised renewables, which are vastly more expensive,” he said, saying intermittent renewable energy such as wind and solar should be renamed “unreliables”. Greens spokesperson for climate change and energy Adam Bandt welcomed AGL’s decision to reject an offer to purchase Liddell and to instead focus on closing it. “This is a decision our kids will thank us for,” said Mr Bandt. “Keeping coal-fired power stations open is a recipe for more intense bushfires, worse heatwaves and more deaths. Coal kills. The coal-huggers in the Coalition should stop trying to prop up Liddell with public money," he said.

The NSW Energy Minister Don Harwin said it was a commercial matter for AGL. The announcement brings to a close the latest chapter in AGL’s efforts to hold to its commitment to close Liddell in 2022. AGL first announced its intention to close the Hunter Valley, NSW-based facility in 2015, giving seven years' notice of the shutdown of the 1680 megawatt power station. Loading Replay Replay video Play video Play video The announcement made few waves until rival generator Engie’s snap decision to close the Hazelwood coal-fired power station in Victoria in 2017, immediately taking around 2000 megawatts out of the National Electricity Market – the energy market that covers all of eastern Australia. This left a gaping hole in power potential and concerns in Canberra that the country could face a major electricity shortfall, bringing swift government pressure on AGL to keep Liddell open beyond 2022 in order to ensure there was no shortfall. AGL instead stuck to its plans to shut down Liddell, proposing instead to replace it in three stages with a mix of renewable generation including wind, solar and hydro; battery storage; pumped hydro storage, and gas-fired power. As part of this, it has already announced plans to build a $400 million gas-fired power plant near Newcastle.

Despite this, the government kept up the pressure on AGL and other power generators to keep the site open, with Alinta making a bid for the Hunter Valley power station in April. Alinta CEO Jeff Dimery: Alinta says its bid was a compelling market offer. Credit:Jeremy Piper At the time, Alinta chief executive Jeff Dimery said his company made an offer at its was approached by the federal government and persuaded by Federal Environment and Energy Minister Josh Frydenberg to make a tilt. Mr Dimery said he disagreed with AGL’s position that Liddell needed to be closed soon, arguing the power station could provide both secure and affordable energy, saying they were willing to invest about $1 billion to acquire and extend its life by five to seven years. It was a major shift for Mr Dimery, who only six months prior was reported as saying there were cheaper options to halt Australia’s energy shortfall than to keep open Liddell.