AGL has outlined plans for Liddell Power Station beyond its announced retirement in 2022. The NSW Generation Plan proposes a mix of high-efficiency gas peakers, renewables, battery storage and demand response, coupled with an efficiency upgrade at Bayswater Power Station and conversion of generators at Liddell into synchronous condensers. The feasibility of a pumped hydro project in the Hunter region is being explored with the NSW Government.

AGL chairman Graeme Hunt said: “This plan demonstrates that old power plants can be replaced with a mixture of new, cleaner technology, while improving reliability and affordability. 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.”

The AGL board has approved:

  • The commencement of efficiency improvements at Bayswater that will create more capacity without using additional fuel;
  • Ordering equipment to convert generators at Liddell to synchronous condensers, and;
  • The signing of contracts to purchase 300MW of generation from two new solar power stations to be developed by third parties in NSW.

An assessment of AGL’s plan found the replacement generation is more affordable at $83/MWh, compared with extending Liddell at $106/MWh.

The plan was also found to deliver reliable, dispatchable power for longer, due to a longer asset life of 15-30 years, compared with a Liddell extension of five years.

Independent analysis found an extension until 2027 would cost approximately $920 million.

Clean Energy Council executive general manager industry development Natalie Collard welcomed the news.

“The replacement of the Liddell power plant with a clean energy hub is one of the clearest indications yet that clean energy will be able to deliver our electricity more cheaply, more reliably and with lower emissions than the power system we have now,” Collard said.

“Just like a car, the older a coal power plant gets, the more unreliable and expensive to maintain it becomes. AGL knows what it is like to operate a coal-fired power plant which cannot always produce power when it is most needed, often due to problems caused by its age and the high temperatures of the Australian summer. Its decision shows that building new clean energy is a more cost-effective solution than extending the life of our old coal-fired power plants.”

AGL said its proposed portfolio to replace Liddell will shrink its carbon footprint by 17.6%.