AGL plans 1.6GW wind and solar, plus storage, to replace Liddell

Liddell power station taskforce

Screen Shot 2017-12-10 at 2.14.02 PM copy
AGL has confirmed its plans to close the Liddell coal generator in NSW and replace it with 1.6GW of renewables, plus storage and other technologies – saying it was a smarter, cheaper, cleaner and more reliable option than keeping the ageing and unreliable coal plant open.

The decision by the board to ratify the plans enunciated by AGL boss Andrew Vesey earlier this year was expected, but it is still proving a difficult pill to swallow for the federal Coalition government, which is forced to declare an attachment to coal to please its right wing rump.

Two of those right wingers, Craig Kelly and Andrew Broad, both chairs of two key environment and energy committees, said on Sunday that AGL’s proposals wouldn’t work, and would cause blackouts because “there was not enough baseload.”

Former prime minister Tony Abbott joined in, telling radio 2GB on Monday that: “We need more baseload power. We need more reliable power. We’ve got far too much unreliable power coming into the system. This idea that batteries or even pumped hydro is going to solve all our problems is dead wrong.

“The only way we can have reliable baseload power is through coal and gas, particularly coal.”

But the AGL conclusions were unequivocal. The combination of wind and solar, plus battery storage or pumped hydro, and some peaking gas generators and demand response, was significantly cheaper than the “old coal” option.

AGL estimated it would have to invest $920 million to keep Liddell open another five years, pushing the cost of its output up to around $106/MWh.

This compares to just $83/MWh for the renewable-focused portfolio, including storage and some (expensive) gas speakers. That wholesale price also compares to an average cost of wholesale electricity in NSW in 2017 of around $100/MWh.

The company says it has already locked in 653MW of wind capacity – at a cost of $62/MWh – from the Cooper’s Gap and Silverton wind farms, and has signed contracts for 300MW of large-scale solar with Moaneng, including the 250MW Sunraysia solar farm near Balranald in NSW.

This solar farm will be augmented by the Midgar solar farm, also to be built by Maoneng, which built and operates the 13MW Mugga Lane solar farm in the ACT.

This solar capacity – tied in with an upgrade to the Bayswater coal generator, the installation of synchronous condensers at Liddell, and some demand response and a new gas peaking plant – would cost around $73/MWh.

Further investments in renewables – totalling 750MW, plus another gas peaking plant, 250MW of battery storage (or maybe pumped hydro) and more demand response – would also cost around $73/MWh.

But the fate of this latter (stage 2 and stage 3 – see table below) investment would depend on what others in the market may do, and therefore may depend heavily on the structure of the proposed National energy Guarantee, or whatever policy is put in place.

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

“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.”

agl liddell plan

The federal Coalition had sought to force AGL to either keep Liddell open, or sell it to a third party, as it hit the buttons marked “panic” and “expediency” at the height of the energy debate earlier this year.

The Australian Energy Market Operator, however, has made it clear that keeping old clunkers like Liddell open is not a preferred option, given that the key metric to keep the lights on is “dispatchable” generation, which means being relied on to produce a certain amount of power at a certain time.

The load-shedding and near blackout in NSW in early February – when two units of Liddell were offline, and the two biggest gas generators also tripped – highlighted the perils of relying on ageing equipment, particularly in the summer heat.

Energy minister Josh Frydenberg said the Coalition would seek the opinion of AEMO on AGL’s proposals, and expected to hear back in February.

“We are technology agnostic … our priority is reliability and affordability …. We look forward to AEMO’s advice in February,” Frydenberg told journalists on Sunday.

Meanwhile, Labor climate spokesman Mark Butler described the AGL decision as “a stunning rejection of Malcolm Turnbull’s coal policy,” and also drew attention to the defeat in Queensland of the LNP, which also supported the construction of new coal plants.

“Malcolm Turnbull has spent this year beholden to the hard right wing of the Liberal Party in trying to map out a coal-fired future for Australia, when the Australian community, the electricity industry, and investors know that the future for Australia’s energy sector lies in renewables, not propping up old, unreliable coal power at enormous cost to consumers,” Butler told journalists in Adelaide.

Butler was asked by a (ABC radio) journalist:

“You might not like the type of power it is or the consequences it causes, but is that really small fire when the lights go out and the air-conditioning is off in the middle of summer?”

To which he responded: “I don’t think that reflects the reality of what is happening in New South Wales and Victoria with very old coal-fired power stations becoming increasingly unreliable with unscheduled outages.”

Greens climate spokesman Adam Bandt also described the AGL decision as a “slap in the face” for Turnbull, although the Greens predicted that the price trajectory of renewables and storage might mean that the “stage two” gas speakers may not be built.

Indeed, much of the stage 2 and stage 3 developments will be heavily dependent on what is decided on the national policy level, what is decided in state policy, a final decision of Snowy Hydro 2, and what other players in the market are up to.

This will also be influenced by policy reflections on the level of competition in the market.

A report by the Australian Energy Regulator last week highlighted how the four big players in NSW – AGL, Origin, EnergyAustralia and Snowy Hydro – jacked up their prices almost three-fold earlier this year following the closure of the Hazelwood brown coal generator in Victoria.

The Institute for Sustainable Futures, however, said that if energy efficiency measures were promoted, the cost would be less than one half of that of keeping Liddell open, but it lamented there were no incentives for utilities like AGL to act this way.

AGL also made it clear that Liddell would not be sold, saying it is currently needed to supply customers. Its land and equipment will be repurposed, and any sale to a third party would require duplication of infrastructure it currently shares with Bayswater.

AGL bought Liddell and Bayswater from the NSW government in 2014, but AGL said at the time that the effective cost of Liddell was zero, after taking into account the value of the younger Bayswater generator and coal stockpiles and supplies.

AGL said its proposed renewables-based portfolio to replace Liddell would shrink its carbon footprint by 17.6 per cent. It intends to operate Bayswater for at least another decade beyond Liddell, and the Loy Yang A brown coal generator until 2048.


32 responses to “AGL plans 1.6GW wind and solar, plus storage, to replace Liddell”

    1. Joe Avatar

      Brunie, I loving your graph. But I m guessing that Matteo Coalavan, Bananabee Joyce and co would ask where is third line…the line for ‘Adani /Carmichael Coal’…the line they would say is below the blue solar one. Sarcasm on my part !

      1. Brunel Avatar

        Ha ha ha! “The line for Adani coal would be lower than the line for large solar power stations”!

        The tragety is – there is no solar power auction in AUS and thus no blue line for Australia.

        But 54% of the coal power stations in Europe are unprofitable:

    2. solarguy Avatar

      Point taken and previously understood by me, but good for the ones who don’t know the facts.

  1. Dee Vee Avatar
    Dee Vee

    AGL are so full of it. If indeed it was as expensive to upgrade Liddell as they say, they would have no issues selling or indeed GIVING it away to another party to maintain and run.

    Elon Musk had zero issues hooking his batteries into a 3rd parties transmission grid, neither would a new owner.

    1. Peter G Avatar
      Peter G

      This station is co-joined to Bayswater, the notion of AGL selling it is a thought bubble that has popped.

      1. Greg Hudson Avatar
        Greg Hudson

        AGL should implode Liddell ASAP so no other moronic company can lay their dirty black coal hands on it IMO.

        1. Brunel Avatar

          Why can these structures remain like the Battersea Power Station in London?

          1. Greg Hudson Avatar
            Greg Hudson

            The power stations in question are all out in the country, not in an urban area like London. They should be ALL demolished ASAP and replaced with solar/wind/batteries.

  2. Ralph Buttigieg Avatar
    Ralph Buttigieg

    Not everyone thinks its a wonderful idea. This bloke doesn’t. When he mentions the $85 subsidy I assume he’s revering to the RET. I thought the NEG was suppose to replace that.

    1. Ren Stimpy Avatar
      Ren Stimpy

      Read the fine print…

      “Removal of the cost of carbon from the LCOE has the effect of reducing the Liddell Replacement Portfolio to $82/MWh and the Liddell lifetime extension portfolio to $92/MWh.”

      Even without subsidies it would still be $10/MWh cheaper to install new solar, wind and firming than to extend the life of a geriatric coal burner by 5 years.

      And btw from 2020 the RET stops being granted to new renewable projects.

    2. Giles Avatar

      Well, he’s wrong about that. Any revenue from the RET would actually reduce the cost. Remember, the contract with silverton and cooper’s gap (of around $60/MWh) includes the RET, it is not additional. Moran doesn’t understand that. He also thinks Liddell is 2,00MW – when it was downrated to 1,680MW years ago, Basic facts elude him and others in the right wing.

      1. Joe Avatar

        …and in last February’s heatwave 2 out of the 4 boilers clapped out so this 1680MW number is worthless when the ‘heat’ literally is on.

    3. john Avatar

      Try not to believe the Murdock press old mate, it is the laughing stock of people who have 2 marbles still left in the brain.

  3. Jon Avatar

    It’s great to see a closure happening in a planned way and the new capacity online ne prior to closure date.

    One issue I do see is Coopers Gap is about 1/4 of Liddell’s 1.6MW replacement at 450MW and it’s situated in Qld.
    The Qld/N.S.W. interconncters are generally run from Qld to N.S.W. and quite often don’t have a spare 450MW of capacity.

    Great for me as I’m in QLD but the NEM isn’t one big grid it’s 5 grids stitched together by some smallish threads. I’d hate to see this happen without some capacity upgrade on the QLD/N.S.W. interconnection and give the luddites more ammunition.
    I’m hopeful the AEMO under Ms Zibelman is all over it, she is sharp so I’m guessing it’ll get sorted.

    1. RobertO Avatar

      Hi Jon, AGL have a plan, Coal will be gone by 2050. As a plan I do not believe that it will suceed as the costs of coal (feeding coal power station) will become more expensive that building new RE. However I praise them for having a plan, given the the Fed Gov has no plan and can not even follow a plan when handed to them on a plate (Finkle Report) which recomended 3 years formal notice on closing power stations (Fed Gov panics over Liddell and some 4 years and 3 months if it closes on 1-01-2022 and longer if it closes 30-06-2022)

      1. Ren Stimpy Avatar
        Ren Stimpy

        I think AGL said in 2015 they would close Lidell in 2022. Seven years notice! Clearly seven years is not enough notice for Slowpoke (Turnbull).

        1. Joe Avatar

          Two Tongues Turnbull is clearly no fan of ‘Liddell 3.0’…AGL’s plan as opposed to Liddell 2.0…Two Tonguers non plan.

    2. solarguy Avatar

      Audrey sharp, ain’t she just, scalpel sharp.

  4. Robert Comerford Avatar
    Robert Comerford

    I have to laugh at Frydenburg when he makes such uneducated statements as ‘despatchable’ when referring to ‘baseload’ coal fired power stations such as Liddell yesterday.
    Clearly this pretend ‘technology agnostic’ minister doesn’t know his arse from his elbow … so to speak !

    1. dhm60 Avatar

      I suspect using ‘despatchable’ when referring to ‘baseload’ is deliberate and part of the plan to flog the NEG.
      btw AI’s “Can’t stand the heat” report dealing with the non-despatchable performance of ‘baseload’ coal fired power stations such as Liddell and certain peaker gas plants during last February’s heatwave rather undermines his “baseload” reliability argument.

    2. john Avatar

      Perhaps one should ask the politicians when they make statements; ” And your science degree or engineering degree was in which area?”
      We are beyond the time where a person who is elected is looked up to as having some kind of credence in saying the truth on advice, it is all now about winning the 24 hour news cycle, so they mouth off mostly total rubbish.

      1. Farmer Dave Avatar
        Farmer Dave

        Excellent idea, John. If the politician replies that they do not hold a science or engineering degree – which is true for virtually all of them – then they should be asked for the names and qualifications of their advisors.

        1. Mike Westerman Avatar
          Mike Westerman

          Dave as a professional engineer of many years I’m not sure engineers would be the best in hurly burly of politics – most of us are too goal oriented to deal well with the dirth of outcomes. But I like your idea of holding our pollies to account as I am sickened by the way they deliberately mislead the public.

          1. john Avatar

            You would be correct Mike you would tell the truth about a subject, if you had the expertise or you would refer to reliable information from suitably qualified people, as you have no doubt all your working life.

        2. john Avatar

          Exactly recently full two page spreads were published week after week with figures for the cost of power that were incorrect.
          No challenge was made but that is expected in a News Corp paper. Every time i hear another lawyer explaining his knowledge of power i just laugh.

  5. dhm60 Avatar

    Any information on what type of solar AGL are planning to use at the Liddell site? A 300 MW Aurora-style CSP with 24 hour salt storage would be an interesting game changer for the NSW grid – not to mention; buggering up the incumbent’s unstated but intended goal for the unlovely NEG.

    Re: prices – “A report by the Australian Energy Regulator last week highlighted how the four big players in NSW – AGL, Origin, EnergyAustralia and Snowy Hydro, jacked up their prices almost three-fold earlier this year following the closure of the Hazelwood brown coal generator in Victoria.”

    Why on earth would AGL continue to flog increasingly more expensive coal generated electricity when they can flog increasingly cheaper renewable generated electricity at the same or higher price? With the help of Abbott/Moylan/Kelly/the Accidental Italian and the other Koal Boyz babbling on about expensive renewables; they will make much fatter profits for themselves and their shareholders – and it will all happen much sooner.
    All part of Talcum’s “downward pressure on energy prices” smoke and mirrors (a very apt adjectival phrase for this debate) routine.

    1. MaxG Avatar

      Exactly what I have been saying all along using slightly different words…
      The corporations will use whatever provides them with the bigger profit; max out the price and at the same reduce cost (by choosing renewables). The cost will come down, but the savings will not be passed on to consumers… it is capitalism after all, and a corporation is not a social enterprise.

  6. GlennM Avatar

    I doubt that Liddell will be still running in 2022. As each of these come on line they will close down another boiler and then another. By 2020 it will still be “running” in name only”

  7. neroden Avatar

    Should be “gas peakers” not “gas speakers”. Two places.

  8. Ralph Buttigieg Avatar
    Ralph Buttigieg

    What I don’t like is why is the NSW government turning over there responsibility to ensure electricity supplies to AGL? The Liddell power station closes in 2022, fine, no problem there but having AGL responsible for the alternative allows them to sell cheap renewables at high prices. The government should do a PPA to replace Liddell.

Get up to 3 quotes from pre-vetted solar (and battery) installers.