AGL Energy has announced it is bringing forward the closure date of its Loy Yang A brown coal-fired power plant in southeast Victoria from 2045 to 2035, writes Gavin Dennett.
Loy Yang A, near Traralgon in the Latrobe Valley, is Australia’s single biggest carbon polluting power plant – emitting around 17 million tonnes of greenhouse gas every year – and it generates around 30 per cent of Victoria’s electricity needs.
AGL is Australia’s biggest energy producer and greenhouse gas polluter. The company has faced increased scrutiny and pressure to move to clean energy following its failed demerger in May 2022 and a push from its largest shareholder, billionaire Mike Cannon Brookes who owns a 11.3 per cent stake, to accelerate its transition to renewables.
Back in February 2022, AGL announced Loy Yang A would close in 2045, three years earlier than its originally proposed closure in 2048.
At the same time, the company announced it would also close its Bayswater black coal-fired plant in the NSW Hunter Valley between 2030 and 2033. These plans remain unchanged despite the amended closure date of Loy Yang A to 2035.
“We have the ambition to supply up to 12 gigawatts of renewable and firming capacity up to 2036 to meet our customer demand, estimated to require up to $20 billion investment,” says AGL chair Patricia McKenzie.
“Our interim target is up to 5GW of new renewables and firming in place by 2030, funding from a combination of assets on AGL’s balance sheet, offtakes and via partnerships, with battery, wind and solar priority investments at this stage.”
According to AGL, bringing forward the closure of Loy Yang A by a decade is expected to save 200 million tonnes of carbon dioxide emissions.
“Coal is not a commercially viable industry any longer,” says Greg Bourne from Australia’s Climate Council.
“This is a commercial and strategic decision by AGL. It reflects the reality of the rapid move towards a 21st century power grid as well as 21st century economics.
“Coal is unable to compete on cost with renewable energy. It is also inflexible, ageing, unreliable and inefficient.
“In Australia and globally, renewables backed by storage deliver the cheapest power, and do so without the greenhouse emissions coal and gas produce.
“This announcement is further proof that coal power station closures are going to happen sooner and more frequently than companies are currently formally committed to.”