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AGM outlines plans for Liddell

The post-Liddell plan provides firm capacity through a combination of high-efficiency gas technologies; upgrades of our Bayswater coal-fired power station; a grid-scale battery at Liddell and demand response.

Skye Laris
Skye Laris
28 September 2017
UPDATE: AEMO has responded to AGL's Liddell plan and has found our full plan would address any potential shortfall following the closure of Liddell Power Station in 2022. Read AGL's media release here. Read AEMO's full letter: Letter - Advice to the Commonwealth relating to AGLs proposal...

Shareholders at AGL’s September AGM were given an update on the technologies being explored to fill the gap in the market created by Liddell Power Station’s 2022 exit.

While the Board has committed to considering the sale of extension of Liddell as requested by the Government at the start of the month, AGL is continuing to develop a plan for transition and rehabilitation at the Liddell site so the Board can evaluate all the options. In developing this plan, we are looking at technology that will deliver reliable energy, at the lowest cost, which meets our emissions reduction targets.

At this stage, the post-Liddell plan provides firm capacity through a combination of high-efficiency gas technologies; upgrades of our Bayswater coal-fired power station; a grid-scale battery at Liddell and demand response. Additional energy would be provided from our Coopers Gap and Silverton wind farms already under construction, with the remainder drawn from AGL’s development pipeline.

The wellbeing of our people at Liddell is vital and we are working towards no forced redundancies of any permanent employees as a result of the announced closure of Liddell. It’s likely some workers at both Liddell and Bayswater will be interested in early retirement and some Liddell workers will be interested in transferring to Baywater. In addition, new investment in energy generation at the Liddell site may offer further employment opportunities.

Energy prices were also a focus of the AGM presentations. Advance notice of the closure of coal fired power plants is critical to avoiding the price spikes we have seen in recent years as a consequence of the sudden withdrawal of other capacity. In this context, it is worth noting AGL provided 7 years’ notice in the case of Liddell. Prices have risen significantly in recent years, however in the longer term, there will only be downward pressure on prices if industry, Government and regulators work together on the range of action that’s needed – including an investment trigger such as a CET.

We have been working on a range of measures to ensure concession and hardship customers aren’t on non-discount standing offers and have been writing to our concession customers to offer them a better deal, as part of our A Fairer Way package. More than 86% of our concession customers and 95% of our hardship customers are now on discounted plans We also know there has been concern about customers being moved at the end of discount periods to higher standing offers without their consent – this is not our practice.

Finally, shareholders were briefed on the steps we’re taking to access more affordable gas to supply our gas customers and our planned peaking gas plants which can ramp up fast to supplement renewable energy when the wind isn’t blowing and the sun isn’t shining, creating a firm supply when combined. Investing in gas supply, storage and peaking capacity will help firm up renewable energy, provide more flexible dispatchable power, while putting downward pressure on energy prices.

We are planning to invest in a gas import facility in Victoria, which will open the domestic gas market to international competition to not only drive down gas prices, but also assist in putting downward pressure on electricity prices. Along with the gas import facility, we are proposing to invest in gas storage in Queensland and gas peaking capacity in South Australia, which will enable a phased replacement of our 50-year-old Torrens A power station.

More details on the AGM presentations can be found here.