AGL signs contractor for Liddell demolition, as it juggles closure units

AGL Energy has taken the first early steps towards the closure and demolition of the ageing Liddell coal-fired power station in the Hunter Valley, selecting a key contractor to advise AGL through preparatory works.

AGL has chosen engineering consultancy Delta Group to undertake the first stage of closure, decommissioning and demolition planning for the Liddell, which is due to close at the end of the summer season in early 2023.

“For the next three months, AGL and Delta will establish appropriate documentation, processes and systems to ensure an orderly and safe closure of the stations units,” AGL Energy’s chief operating officer Markus Brokhof said.

“Delta will help identify specific risks and controls for decommissioning, asset salvage, remediation and demolition.”

AGL plans to close Liddell in stages across 2022 and 2023. The first of the power station’s four 420MW units will close next year, with the remaining three units expected to be brought offline in 2023.

AGL wants to convert the site to an ‘energy hub’ – replacing much of the lost generation capacity with a combination of new lower emissions and storage projects, while re-purposing existing infrastructure such as network connections and substations.

The plan includes a 150MW one hour big battery that could grow to 500MW, for which AGL has already begun seeking development approval.

The now 1,680MW power station (it used to be 2,000MW) is approaching 50 years in age, and has been the subject of intense government scrutiny, including federal government attempts to find ways to keep it operating for longer.

“For 50 years, the Liddell power station has produced around 8000GWh of electricity annually, powering more than one million average Australian family homes,” Brokhof said.

“The station is now nearing the end of its technical life and our transition program is about ensuring the safety of our people and preparing other sources of generation to continue delivering reliable electricity.”

In a 2017 assessment, AGL estimated the combined rehabilitation costs for the Liddell power station and the nearby Bayswater power station, which itself is expected to be closed in 2035, at almost $900 million. As a result, the closure of Liddell and AGL’s planned investments in replacement projects will represent a substantial investment for the energy company.

“Australia’s future energy needs will be delivered through a combination of technologies – gas, hydrogen, pumped-hydro, renewables and firming technologies and industrial developments,” Brokhof said.

“We are continuing to work on a number of plans for the Liddell site as we develop an Energy Hub which include solar storage systems, grid-scale batteries and a waste to energy facility.”

AGL had initially planned to close the ‘Unit 4’ at Liddell power station next year, as the first stage of power station’s decommissioning.

Last week, AGL applied to the Australian Energy Regulator to amend the plan, instead closing Liddell’s ‘Unit 3’ first, after finding that ‘Unit 4’ was the more reliable of the two generation units.

The ‘Unit 3’ generator was taken offline for most of the 2020-21 summer, due to a transformer incident, that had resulted in a serious injury to a worker at the plant.

The loss of the unit also required the Australian Energy Market Operator (AEMO) to trigger the Reliability and Emergency Reserve Trader (RERT) mechanism to ensure adequate supplies of power, and highlighted the increasing risk of reliability challenges of ageing coal plants.

Delta Group previously worked with French energy giant Engie on the decommissioning of the Hazelwood power station in Victoria, and said that it would seek to build off that experience while advising on the closure of Liddell.

“We were delighted to be selected for this important stage of the Liddell power station project and look forward to working with AGL,” Delta Group CEO Jason Simcocks said.

“This opportunity complements our work in Victoria’s Latrobe Valley at the (former) Hazelwood Power Station for ENGIE Australia and we hope to bring a variety of skills and experiences to support AGL’s transition program and the Hunter Valley community.”