AGL shuts down first of last three units at Liddell, Australia’s oldest coal generator

Australia’s biggest coal generator and polluter AGL Energy has shut down the first of the last three operating units at the country’s oldest coal fired generator Liddell.

The No 4 unit was shut down at around 8.30am on Monday morning, the remaining two units due to be closed down on Wednesday and Friday.

This will leave four coal fired generators in NSW – at Eraring, Bayswater, Vales Point and Mt Piper – with some market predictions suggestions they could all be closed within a decade.

The Liddell unit closure was captured in a graph by analysts GPE NEMLog 2, along with the output of the other two units at Liddell and the four units at the neighbouring Bayswater plant. Two of the Bayswater units are also not operating, due to maintenance .

The wholesale electricity price at the time of closure was around $20/MWh, as illustrated in the graph below from PocketNEM which also shows the closure, which was timed to coincide with the growing output of solar during the day.

The closure of Liddell is not expected to have any impact on supply or reliability on the grid, although it has been noted by some analysts that prices could rise as a result.

It is important to note, however, that price rises will not be the result of any increased cost of production, and will merely the decision of key players – including the federal government owned Snowy Hydro – to take advantage of the reduced competition and profit from consumers.

There is still some debate about the impact of the Eraring coal generator, which at 2.8GW is the largest in the country. It is currently scheduled to close in August, 2025, although there is some speculation that one or two units might stay open for an extra summer, as happened at Liddell.

The Australian Energy Market Operator has warned that the closure of Eraring could cause a tightening of the supply balance, but its annual assessments do not take into account projects not get classified as committed – these include the wind, solar and storage auctions being held by the NSW government, and other projects.