19 September 2017
In recent weeks AGL has been criticised for its plan to close the Liddell power station in 2022, with pressure applied by the Prime Minister, his government and coal industry representatives to extend the life of the power station.
These criticisms are deeply unhelpful and the work of pro-coal ideologues. So in the run-up to the company’s annual general meeting on Wednesday 27 September 2017, Market Forces is supporting shareholders in asking AGL’s board to stand firm on the decision to close Liddell by 2022 as part of its plan to transition from old, polluting power to clean, renewable energy.
In 2022, Liddell will be 50 years old, its expected economic life well and truly over. Its age is already showing, with the power station operating at a terrible utilisation rate and creating an array of local environmental and health hazards. AGL has already spent $143 million on Liddell to improve reliability, and committed to spend another $159 million on upkeep before 2022. The Finkel Review estimated refurbishment costs at $500-600 million.
AGL has made much of its role as a key player in the transition to a renewable energy-powered Australia, by building renewable energy and battery solutions and helping Australia phase out coal. If anything the timeline for the closure of the company’s other major coal generators, Bayswater and Loy Yang, is too lengthy, committing the company to operating assets that will become increasingly expensive as they age, especially in comparison to renewable energy which continues to dramatically fall in cost.
Further, if AGL’s commitment to close coal power is intended to align the company’s business model with the objectives of the Paris Climate Accord, it should be looking to “get out of coal” far sooner than the middle of the century.