Federal energy minister Angus Taylor will form a new taskforce to investigate the implications of the looming closure of the Liddell power station, a move that will continue pressure on owner AGL Energy to keep the ailing coal-fired generator operating for as long as possible.
Taylor said the taskforce, to be established in partnership with the NSW Government, will consider “all options”, and did not rule out using taxpayer money to extend the life of the plant. AGL responded by saying doing so would cost “a lot of money” and any such move “does not stack up.”
The announcement of the taskforce – whose members have not yet been named – has already been slammed by environmental groups as a delay tactic and is a pretext to the government to pour money into ageing coal infrastructure.
It is yet another intervention by Taylor into the energy market, including his so-called “big stick”, and his proposal for underwriting new generation investments, including potentially extending the life of the Vales Point coal fired power station.
“The Morrison and Berejiklian Governments are acting to ensure there is no repeat of the impact on the National Electricity Market following the premature closure of the Hazelwood Power Station in Victoria,” Taylor said in a statement.
Hazelwood, however, is a different situation. Its closure was announced with little warning, but AGL has given six years notice, giving plenty of time to it and other participants to fill the gap. There will also be the new “reliability mechanism” that is designed to ensure retailers have the capacity to fill up any shortfall.
AGL Energy recently announced that it would delay the closure of the 2,000MW Liddell power station, to just after the 2022/23 summer, citing concerns of supply constraints during peak demand periods in summer. It had flagged a closure in 2022.
The closure of Liddell power station has been a hot political topic, with the Federal Coalition government undertaking an unprecedented intervention in AGL’s plans, trying to find a buyer for the power station who will keep it open, ignoring the wishes of AGL.
News of this latest intervention came as the Australian Energy Market Operator put out a call for emergency reserves to deal with the upcoming summer heatwaves, and noted the huge increase in coal plant outages across the grid. Brown coal availability is now at its second lowest level ever. See AEMO seeks emergency reserves as coal outages increase across NEM
AEMO also noted that rooftop solar is not just reducing average demand, it is also having the biggest impact on emissions. See Rooftop solar slashes demand levels and emissions across main grid
The Federal government says it is keen, as are all stakeholders, to avoid some of the issues that arose during the closure of the Hazelwood power station, and it was one of the key motivators of a rule change requiring power stations to give at least three years notice of closure.
This raises the question of whether the taskforce is even necessary. AGL has long acknowledged that a comprehensive plan is required to manage the withdrawal of the Liddell power station from the national energy market.
AGL presented such a plan in late 2017, which included $1.36 billion in new infrastructure investment that would see the coal-fired generator replaced with gas-peakers, a mix of solar and wind projects, demand response and large-scale battery storage.
The plan won the endorsement of the energy market operator, with AEMO saying that the plan was ‘more than enough‘ to replace the capacity lost through Liddell’s closure.
However, Taylor may have already flagged the kind of outcome he hopes to see from the Liddell taskforce.
“The Liddell Taskforce will look at all potential impacts of Liddell’s closure, options for extensions or like-for-like replacement, and ensure affordable and reliable energy for NSW families and businesses,” Taylor said in a statement.
What will ‘like-for-like’ mean?
“Any replacement option must be like-for-like. That means if you’re replacing it with solar and wind, there’s got to be a solution to what happens when the wind doesn’t blow and the sun doesn’t shine,” Taylor expanded in an interview with ABC Radio National.
One can read between the lines, and with Taylor saying that “all options need to be on the table” that there will almost certainly continued advocacy from the Coalition government for new or extended coal-fired generation.
Taylor is obsessed, like most conservatives, about the concept of “base-load”, which in their minds means either coal or nuclear. This contrasts with the focus on “dispatchable” energy favoured by the industry itself. Last week, Taylor announced he had asked a parliamentary committee to look into the economics of nuclear power in Australia.
AGL has previously said that the ageing plant would require $900 million in new investment to keep it running for another ten years.
“I’m not going to get into speculation about what the outcome of the taskforce is going to be. What I’m going to say is that we’re going to find a solution to this problem, and we must because we can’t see a repeat to Hazelwood,” Taylor told the ABC.
.@paulwkennedy: Are you talking about kicking in public money to keep AGL's Liddell power station open longer?@AngusTaylorMP: We'll work through the problem. All options are on the table.#auspol #energy pic.twitter.com/ohThAaiTPH
— News Breakfast (@BreakfastNews) August 8, 2019
The decision to further drag out the future of the Liddell power station is in contrast to this week’s decision from the WA Government, which opted to close the Muja C power station, which is nearing the end of its operating life, after concluding that it could not justify burdening WA energy consumers with the $350 million cost of keeping the power station operational.
The formation of the taskforce has already attracted criticism from environmental groups who view the announcement as a distraction and a delay tactic, when the Government should be focusing on the decarbonisation of the energy system.
“This taskforce is a farce, and all it is serving to do is underline the Federal Government’s obsession with propping up aging coal burners at any cost,” Greenpeace Australia Pacific’s head of campaigns Jamie Hanson said.
“Extending the life of old, unreliable and polluting coal-fired power stations like Liddell or considering ‘like for like’ replacements is exactly the opposite of what the Federal Government should be doing.”
“This is part of a pathetic culture war centred around Taylor’s obsession with propping up a dying and dirty industry at any cost. Australians want to move on and see solutions in the form of clean and reliable renewable energy and storage,” Hanson added.
The membership of the taskforce has not been disclosed, but will likely include representation from Federal government departments, led by the Department of the Environment and Energy, their NSW government counterparts and representatives from AGL.
The taskforce is expected to deliver its findings and recommendations before the end of the year.