Malcolm Turnbull has secured a commitment from AGL boss Andy Vesey to consider a five-year extension to the controversial Liddell power station in NSW or its sale to an alternative owner under plans to prevent a dramatic energy shortfall in 2022.
The AGL chief executive has agreed to take the proposals to the AGL board and respond within 90 days in a new sign the coal-fired power station could keep operating.
The development late on Monday came after Mr Turnbull met Mr Vesey in Parliament House to discuss the options, clearing the way for the board decision.
“The outcome of the meeting is that AGL will take to its board a proposal to keep Liddell open for another five years or to sell to another party,” said Energy Minister Josh Frydenberg after the meeting.
“At the same time, the company will also work up a plan to ensure sufficient additional supply into the market equivalent to what is coming out of Liddell.
“This would be firm dispatchable capacity and have no adverse impact on consumers both in terms of price and the reliability of the system.”
The discussions centre on a warning issued by the Australian Energy Market Operator last week about the need to develop at least 1,000 megawatts of new electricity capacity by 2022 to make up for the expected closure of the Liddell coal power station.
A leading option is to build new coal-fired power stations to match the capacity of Liddell, given the advantage that coal-fired power have in scaling up as demand grows.
Asked if AGL asked for federal financial assistance, Mr Frydenberg said that was not the nature of the discussions.
Mr Vesey confirmed the commitment to take the future plans to the AGL board but warned that the Liddell power plant had failed in recent months and needed a big investment to keep operating.
“I was asked to take to the AGL Board the Government’s request to continue the operation of Liddell post 2022 for five years and/or sell Liddell, which I agreed to do,” Mr Vesey said in a statement.
“Short term, new development will continue to favour renewables supported by gas peaking. Longer term, we see this trend continuing with large scale battery deployment enhancing the value of renewable technology. In this environment, we just don’t see new development of coal as economically rational, even before factoring in a carbon cost.
“The long notice period we have given reflects our commitment to managing carbon risk for shareholders and avoiding the volatility created by recent sudden withdrawal of capacity.”
" Mr Vesey confirmed the commitment to take the future plans to the AGL board but warned that the Liddell power plant had failed in recent months and needed a big investment to keep operating. "
So the taxpayer, could be up for a minimum of $ 300 million,as per Muja here in WA, a waste of money for very little return.
