AEMO says AGL plans more than enough to replace Liddell

The Australian Energy Market Operator has endorsed AGL Energy’s plans to replace the soon-to-be-closed Liddell coal plant in New South Wales, saying that they are more than enough to meet the potential shortfall created by the closure.

In a report to the federal Coalition, which had lambasted AGL over its Liddell closure plans and had attempted to force it to keep it open a further five years, AEMO says the closure will leave a shortfall of around 850MW of dispatchable capacity.

But AEMO says AGL’s plans for renewables, storage, demand management and gas generation – should they be delivered in full by AGL, or by another party – would deliver at least 1,000MW of new dispatchable capacity.

“In its entirety, all three stages of AGL’s plan would deliver sufficient dispatchable resources to fill the identified 850MW resource gap,” AEMO writes in its letter to federal energy minister Josh Frydenberg.

It says the plan pushes the risk of load shedding to a one in 20 year event.

AEMO notes that AGL, which only confirmed the decision to close by 2022 in December, had so far only committed to a $200 million upgrade of the Bayswater power station, but said that the rest of the capacity outlined in AGL’s three phase plan would be sufficient.

It did note, however, that if other market participants stepped in with their own plans – be it for battery storage, pumped hydro, gas generation, demand management – then AGL may no longer see an opportunity to go ahead with its third phase (which is mostly a 250MW battery storage unit).

AEMO’s assessment was requested by the Coalition government, which was disbelieving about the ability of new technologies to replace an ageing, and an increasingly unreliable coal generator

AEMO’s base case was more or less unchanged from its assessment last year: that if the market did not respond to the Liddell closure with new dispatchable capacity, then there was a heightened risk of a supply shortfall and a risk of outages, particularly in very hot summer days.

And mainstream media – who were given copies of the report and Frydenberg’s response by his office a day ahead of RenewEconomy – snapped their heals to attention and chose to echo the Coalition talking points: i.e. what might happen if AGL, and other market participants, chose to do absolutely nothing.

“Closure sparks blackout warning,” headlined Rupert Murdoch’s The Australian on its front page (see internet post image to right).

“Blackout fears as AGL lags on plan,” thundered Murdoch’s Daily Telegraph.

Closing Liddell could cause blackouts for 200000 homes: AEMO, the AFR said.

Warning of power shortfall risk after closure of Liddell plant, wrote the Guardian.

“Blackout risk without better power plan,” said both Nine News and The West Australian.

The mainstream media’s focus on blackout risks has been consistent. It continually warned of blackouts over the past summer, even though AEMO repeatedly underlined the fact that these scenarios were only their “do nothing” outcomes.

We wrote about it at the time – Blackouts and baseload: Debunking myths of AEMO reports and Liddell.

In any event, there were no blackouts caused by a lack of supply over the last summer, much to the disappointment of many in the conservative media who had been calling for them to show that renewables do not work.

Frydenberg’s press release in response to the AEMO report on AGL’s plans for Liddell also focused on the “do nothing” outcomes.

The Coalition has not just fought against the closure of Liddell, but many members continue to argue for a new coal-fired power station to be built – despite the complete lack of interest from the private sector.