AGL seeking big wind project proposals to help replace Liddell

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AGL seeks another 500MW of wind capacity as it gears up to replace Liddell coal plant with mix of renewables, storage and gas.

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Lake Liddell with power stations
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AGL is taking the next step in its plans to replace the ageing and increasingly unreliable Liddell coal generator in NSW, and is about to seek expressions of interest (EOI) for around 500MW large scale wind farms.

The company plans to close Liddell in 2022, and said in December it would build around 1.6 gigawatts of wind and solar, plus some storage and other capacity, arguing that it would be significantly cheaper than keeping Liddell open, as the Coalition government had demanded.

More than half of that new wind and solar capacity is already spoken for – from the Cooper’s Gap and Silverton wind farms already under construction, and a contract for 300MW of large-scale solar with Moaneng, including the 250MW Sunraysia solar farm near Balranald in NSW.

The new initiative, or EOI, seeks another 500MW of wind, either in one project, or several large ones – minimum preferred project size is 200MW.

In an email to RenewEconomy, AGL said its preference was projects at an advanced development stage, with an ongoing wind monitoring regime, land agreements, development approvals and grid connection arrangements underway or already in place.

AGL will either invest directly or seek to negotiate contracts. Clearly, the EOI helps it to get the lay of the land. And that will be followed by a Request for Proposal (RFP) for shortlisted tenderers with subsequent due diligence and possible negotiation.

The closure of Liddell will signify the start of the long process of reversing AGL’s sudden switch in business models from green to black that occurred when it bought Loy Yang A in Victoria and Bayswater and Liddell in NSW a few years ago.

Those coal generators – it had none before – now account for 83 per cent of its total generation, and the bulk of its profits. With gas, fossil fuels account for 90 per cent of its output, and it intends to hang on to Bayswater until the 2030s, and Loy Yang possibly as late as 2048.

Those plans will largely depend on the scale of cost reductions in wind and solar, and the technologies that will make them “dispatchable” (i.e. batteries and pumped hydro) and which can provide grid security.

AGL’s plans also encompass some of those technologies, including a potential 300MW battery storage, an unspecified amount of pumped hydro, a 250MW fast acting gas plant, and some demand response.

Its assessment of Liddell make clear that these technologies are already cheaper than extending the life of ageing coal units.

Wind and solar were put at a combined cost of just $62/MWh, and the combination of 250MW of renewables, the same amount of battery storage capacity, and a small amount of demand response, at $83/MWh.

This compares to the cost of keeping Liddell open ($106/MWh), and by some out-of-date estimates from consultants to Snowy Hydro, anxious to justify the soaring cost of the Snowy 2.0 pumped hydro scheme, that renewables and storage would cost between $350/MWh and $750/MWh.

The reality of the cost cuts, and further investigation of how much storage would actually be needed, and when, is likely to define the pace of the rollout of new wind and solar farms, and batteries and pumped hydro, whether owned or contracted by AGL or others.

It remains to be seen what the Australian Energy Market Operator says in response to the AGL plans – it has been asked by Canberra to see if they would adequately replace Liddell, a request that seemingly ignores the workings of the market.

It also remains to be seen how the mooted National Energy Guarantee is finalised, and whether this would result in any requirements in NSW, which has a relatively low level of wind and solar, although it has a huge pipeline of potential projects.

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43 Comments
  1. Kevfromspace 8 months ago

    When Silverton Wind Farm was first developed, it was proposed to be the largest wind farm in the NEM, at over 1000MW. God knows why AGL scrapped those plans when they bought it, reducing the capacity to 200MW. They also have an option to expand the current designs of the generator by adding an additional 100MW. Surely this is a good idea, considering the fact that the wind resource is world-class and the grid connection is already there.

    • Malcolm M 8 months ago

      The Buronga-Broken Hill 220 kV transmission line (X2) has a rating of only 95 MW, and AGL already have a 54 MW solar farm at Broken Hill. AGL would be reliant on local demand from the mine and city to justify a 200 MW wind farm, but there will undoubtedly be times of high wind, high solar and low local demand when some curtailment would occur.

      If the next NSW transmission plan includes a line upgrade (which would be paid by all NSW customers through their connection charge), then the expanded wind farm would go ahead.

      For a developer with such a good site, the costs of filing applications for 1000 MW wouldn’t be greatly different from 200 MW.

      • Kevfromspace 8 months ago

        Thank you for that explanation Malcolm.

        • Vox 8 months ago

          Correct. To get the full 1000MW away, they would need to build a new 300km+ 220kV transmission line to a Vic node (Mildura, if I’m not mistaken).
          Based on that ludicrous proposal, AGL would have bought it on the basis of only a proportion of the full development being build.

    • Brian Dooley 8 months ago

      Wonderful since the operators of wind farms pocketing half their revenues from robbing consumers via the RET certificates. Labor Greens have betrayed the poor.

      • Jon 8 months ago

        What is your logic there????

        RET is on installed equipment not planned.

        • Brian Dooley 8 months ago

          Were paying it here and now. Engie energy only had their profit forecast sustained by the subsidies. Yes multinational profits. Labor and the Greens should be ashamed.

          • Giles 8 months ago

            You want to provide a link to that? Engie make billions from global operations. what sort of revenue do you claim they get from Australia subsidies?

      • Vox 8 months ago

        You do know that the RET certificates are not paid by consumers, correct? They are paid for by polluting generators, which then all contribute to NEM market.

        • Brian Dooley 8 months ago

          Who do you think the retailers pass the cost onto ? The cost is absorbed by customers. Do you think the government absorbs it ? Even the Govt agrees it adds over 15 % at least to bills and thats conservative.

          • Giles 8 months ago

            Er, no. The AEMC and the ACC put it at 5% at most, and all studies point out that the cost will be offset by the price falls caused by the renewables, now that they are finally getting built after the big retailers held market to ransom and the Coalition government stuffed around with the policy.

          • Brian Dooley 8 months ago

            Well you ignore the incredible increase in wholesale prices due to the closure of Hazlewood ? When the wind and sun don’t do what we want them to wholesale prices soar. You are a good soul so lets discuss an area we can agree on: retailers in Australia have profit margins way above global average. Our regulators intrude into many areas but ignore this one. AGL are reportedly making a 30% margin where the OECD average is around 6%. On this forum I believe we all have good sincere beliefs. Maybe if we can find some common areas of agreements we can then discuss our differences a little bit less emotionally. I wish you well buddy and hope we may agree to always be disagree with grace.

          • Vox 8 months ago

            Well, it isn’t nearly as linear as you make out.
            First, the retailers act within the Energy Market, and whether you know it or not, renewable energy plants also operate within that market, so one is penalised with the cost of a REC, and the other is benefitted by the cost of a REC. The cheapest get dispatched first, and so renewables gain an advantage in that market. So rather than just add the cost of a RET to wholesale prices, there is a whole dynamic equilibrium between generation types that likely results in a price lower than that.

            Then, the other side that matters is that electricity price increases are not free market, but set by the AEMC, so it is not a simple matter of retailer A deciding that it now wants to charge consumers an extra X amount to offset other costs.

            And it’s not only the government that is saying Green programmes added 15% to the price, a whole other set of consultancies reach the same conclusion. green programmes added 15%, transmission and distribution upgrades added 70%+.

          • Brian Dooley 8 months ago

            You nailed it beautifully. Its more complicated than petrol prices. And when a market is so convulted especially by inept government regulation and obsufucation you know a rort is on. Used to be simple. State Electricity Commisons produced the power local distributors sold it. Like every government policy post Hawke Howard a stuff up costing the poor while satisfying the chattering class.

  2. Jon 8 months ago

    I’m very keen to see Liddell and all coal fired plants closed, I’d prefer brown coal first but any of them closing is a good thing.

    It’s odd that they are including Coopers Gap wind farm as Liddell capacity replacement.
    The Qld-NSW transmission lines are capped at 1211MW and it’s not unusual to see them topped out now.

    • Ray Miller 8 months ago

      As the largest NEM interstate transmission connection is QLD- NSW as you state and only a small fraction of total of any of the largest 3 states, the NEM is almost fraudulent in claiming “National”EM.
      I would expect then AGL should be obligated to build all the replacement capacity in the NEM vicinity of Liddell.
      Which points to the need for an overall energy transition plan which currently is in pre-kindergarten, but giving AEMO some credit for at least recognizing a problem and getting some planning underway.

      • Jon 8 months ago

        The NEM is a grid made up of smaller grids with interconnectors as you say.
        The more there is supply/demand imbalance in one of the subgrids the more important the interconnectors are, with more non synchronous generation the interconnectors are going to become more important.
        NSW & Vic subgrids are in the fortunate situation of having interconnectors to multiple subgrids, Vic with 3 and N.S.W. with 2.
        S.A. Tas and Qld with only one interconnector have a lot less options when there is a supply / demand imbalance.

  3. Dee Vee 8 months ago

    Sorry AGL, wind does not replace baseload generation, how are you going to keep the lights on?

    • Jon 8 months ago

      We don’t need baseload, we need dispatchable.

      • Matt 8 months ago

        Neither wind nor solar are dispatchable at anywhere near the capacity factors of conventional thermal.

        • Vox 8 months ago

          well, isn’t that the balling up a whole lot of unrelated items…

          • Matt 8 months ago

            No – it’s absolutely the central point.
            Conventional thermal generates around 85% of the time. Sure Liddell is clapped out and has lower reliability than this, but not much lower overall.
            Wind generates about 47% of the time and solar barely 26%.

            If we are going to keep the lights on, we need high capacity factors. Until battery technology evolves an awful lot, they can not supply utility scale energy at an affordable price. Great for frequency control and very short term supply response, but not much else.

            The way new solar projects are reported needs greater scrutiny; a 100MW solar project means ‘100MW when the sun is directly overhead on a cloudless day at 25 Deg C.’ In practice, it means the project will deliver average output of 26MW.

          • Vox 8 months ago

            The amount of confusion there is astounding….

            So lets start with the first principles:

            1- Capacity Factor isn’t a measure of how much proportion of the time a unit is generating, it is a ratio of how much energy it generates by the maximum amount of generator it could generate.

            2- Nameplate capacity is mostly irrelevant, energy generated is king. You are making an unbased assumption that AGL are looking to replace 100MW of coal with 100MW of Wind or Solar. They are looking to replace the 100MW of coal at its capacity factor by whatever nameplate of renewables and battery at its capacity to cover an amount of generation in GWh.

            3- Generators, banks, or investors have absolutely no interest in how renewable energy plants get “reported”. Nameplate capacity matters only to know what the maximum output might be, and whether they can make use of that maximum. They understand that the economics of generating plants (either foissil or renewable) are on the basis of CAPEX, OPEX, and energy generated, and thus the cost of energy.

            4- That equation for batteries is then massively more complicated, because they can get revenue from a larger array of functions, be it energy arbitrage, participating in frequency markets, renewable output firming, of as a physical hedge to high prices, so saying that batteries are expensive or not is something that you have no understanding of, and is in fact blue sky at the moment.

          • Matt 8 months ago

            Rise above the insults Vox (if that really is your name).

          • Vox 8 months ago

            Isn’t that a curious remark. Where did I insult you?

          • Jon 8 months ago

            I think you’ll find average output for single axis tracking solar is a fair way over 26%, especially as they are rated at AC output and generally have a higher DC output than that.
            Eg Qld has one commercial solar farm being Kidston rated at 50kW so has a theorical output of 8,400kWh per week at nameplate if the sun shone for 24/7 (24 x 7 x 50 =8400).
            OpenNEM shows large solar output for Qld of 3.5GWh rounded to one decimal.
            3500 / 8400 = 41.6%.
            I think it’s a fair while since Liddell ran at <40% of nameplate for a week.

          • Dee Vee 8 months ago

            not comparable at all, as the solar farm doesn’t run at night

          • Jon 8 months ago

            I did not say that solar farms run at night, I can’t remember anyone saying that.
            They do however run during the day where the power demand is highest which is kind of convenient.

          • palmz 8 months ago

            Most houses use two parts of no power while the people are asleep I would say they use disproportionately more peak power than businesses (more peaky)

            If you don’t agree I think you know less about the usage patterns than you like to think. (you can add a link showing that I am wrong)

            An energy efficient home (under 15 kWh a day average) with a large air con (10 to 15 Kw) can use 4 or 5kWh each hour when going. (just an example)

            …….and just so you know base load is pretty much made for business as they off-tern have steady power requirements (constant load)

            The actual cost of the power they use IS LESS to make as they use all that other wise unwanted base load.

          • Dee Vee 8 months ago

            Just look at the NEM spot price and demand and you will see you are wrong about usage. It is mostly used during the day when people are at work, and there is barely even a blip when they come home and start using power for cooking etc, and no blip at all when residential “offpeak” systems are running. We have been “conditioned” to believe residential users create peak demand, so the generators can attempt to rip us off for using power when we need it. even in the middle of the night (3am) in NSW 50% of the power usage of the daytime peak is being used, which just goes to prove its 24*7 businesses using this power, not homes.

          • palmz 8 months ago

            Do you know your load factor? I am looking at one of over 66% (it’s that low as that site has solar on it) …. So it uses less power during peak hours.

            If you really think businesses get cheap power you can try to get put on demand charges! (And use over 160mWh per year)

            If you are in the powercor network you should be able to get them now.

            Once again do you have a link to a report about the useage patterns of businesses compared to residential!

            Here is one look at page 8

            https://www.google.com.au/url?sa=t&source=web&rct=j&url=https://www.nfpa.org/-/media/Files/News-and-Research/Resources/Research-Foundation/Research-Foundation-reports/Electrical/powerconsumption.ashx%3Fla%3Den%26hash%3DF3ADC754741DAAD7B73C1BE1A184FC5A9D1E6E5D&ved=2ahUKEwiunrmn-ajZAhVIm5QKHW5ADEwQFjACegQIExAB&usg=AOvVaw3YGzXRyMcEw1zGFZKYoj6Q
            Also are we only talking about the cost of power or are we including poles and wires?

          • Dee Vee 8 months ago

            Just look at usage loads, probably 85% of current usage is baseload, with big business being the main consumer and they use it 24*7. Let business pay for expensive power, and keep the cheap baseload for residential customers. At the moment its the opposite way around, Big Business get power dirt cheap, and consumers are gouged.

          • Jon 8 months ago

            I agree with one of your comments and disagree with another.
            There is no doubt that big business with its bargaining power pays a lot less than we do as independent consumers do.
            If big business was 85% of usage and used power 24/7 the power usage pattern on OpenNEM would be fairly flat with a small fluctuation of less than 15%, what OpenNEM shows is that the troughs in demand are less than 2/3 of peak in demand.

      • Dee Vee 8 months ago

        Rubbish, we need baseload to keep the lights on, you can keep your expensive dispatchable power for business peak demand.

        • Jon 8 months ago

          We do need electricity at night to keep lights, essential services and 24 hour businesses running.
          We don’t need to run what is currently “off peak” at night.
          The reason that HWS, pool pumps etc are “off peak” is to make an artificial “baseload” to work with the best technology available at the time which was coal fired power stations.
          Technology has moved on as it always does and other technologies have become available whether we want it to or not.
          I don’t mind if you prefer to use the term “baseload” but if you do please limit it to what is actually needed at any one time and don’t include demand that can be time shifted without any negative effect on the end user.

          • Dee Vee 8 months ago

            Residential customers use maybe 20% or less of the electricity generated, and the “peak” demand is when they come home in the evenings and start cooking meals and maybe using heat/cooling. The whole peak/offpeak residential thing is pretty meaningless these days because it is business using most of the power, even at night time. Peak residential usage is minimal.

            HWS’s and pool pumps used at nighttime are still only using less than the peak residential 20% load of power being generated.

            Its about time the energy guzzlers (Business not residential) paid their fair share, instead of getting discounts while home owners and renters subsidise them with punative pricing.

            You might be surprised to learn datacentres are actually the main guzzlers of power in Australia, followed closely by industries like Aluminium smelters.

          • Jon 8 months ago

            I’d be more surprised if you could explain how there is such a big fluctuation between day and night usage if 80% of usage is 24/7 business usage.

          • Dee Vee 8 months ago

            Business (i.e. office workers, light industrial, railways and shops etc) are maybe 40% of the daytime load, and heavy industrial usage is the rest. heavy industrial is the 24*7 usage, the rest is time variable, i.e. mostly 9am-5pm, but still attributable to business, not residential. During the day time, residential usage is maybe 10% because its not peak demand time, but with all the solar systems homes are installing, they are well ahead in supplying a lot of their own demand in the day time anyway.

          • Jon 8 months ago

            Sorry, I thought you said that data centres and aluminium smelters are the biggest guzzlers, and they definitely run 24/7.
            Home usage demand is still demand, regardless if home solar is supplying it.

  4. Brian Dooley 8 months ago

    Just read the wind farm associated with a certain promoter of renewables made as much revenue from RET subsidises as it did from electricity sales . Great lurk. Any comment Renew Economy or are you just a lobby group for shonky businesses masquerading as concerned conservationists. End the robber baron rorts now.

    • Giles 8 months ago

      Please, tell us more. which company, which wind farm, which figures. Why was the LGC price so high? Was it because the big retailers didn’t invest in the wind and solar farms they were legally required to, and then made off like bandits when the supply got short? Tell us what price the new wind farms – silverton, Cooper’s Gap, Stockyard Hill? etc are going to get for their LGC’s. If your response is more than zero, then you are wrong.

      • Brian Dooley 8 months ago

        You answered your own question. Foolish government rules make power retailers buy a certain amount of power from RET providers. Then they pay a subsidy on top of it paid for by their customers. Do we require pubs to by a certain amount of beer from certain breweries and then charge a premium to their customers for it ? No. Government regulations outside minimum safety health worker protections etc requirements are a disaster.
        As to the future wind farms if they are unsubsidized fine. Ill believe it when it happens. Up the workers down with the bourgeoisie basket weavers.

      • Brian Dooley 8 months ago

        Oh by the way Giles before this Rudd Green lunacy our poor folk had access to cheap power. To hell with bourgeoisie affectation and hysteria . Do you really think Hazelwood power station shutting down will make one jot of difference to climate?

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