AGL has committed to building a 252MW gas-fired electricity generation plant to replace the Liddell Power Station.

The commitment represents an estimated investment of up to $400 million and would comprise flexible, fast-start generation capable of delivering rapidly dispatchable peaking and firming capacity into the National Electricity Market.

AGL is assessing sites for the project near AGL’s Newcastle Gas Storage Facility. This power station will consist of 14 reciprocating engine units capable of generating 18MW of capacity each. Construction on this project would be targeted to complete during the 2022 calendar year.

AGL Managing Director and CEO, Andy Vesey, said AGL is committed to supporting the orderly transition of Australia’s electricity generation capability to modern, clean and reliable energy supply.

“That’s why we gave seven years’ notice of when we intend to close the Liddell Power Station at the end of 2022, and we are pleased to commit today to build the power station near Newcastle.

“AGL has now committed ahead of schedule to stage one of our NSW Generation Plan submitted to the Federal Government and the Australian Energy Market Operator (AEMO) in December 2017.

“In addition, we continue to assess the potential to develop a further 500MW of gas-fired generation capacity as part of stage two of that plan and are inviting commercial and industrial customers to provide their long-term demand commitments to enable AGL to progress this project.

“AEMO has confirmed that our plan addresses the capacity shortfall that may occur as a result of Liddell closing, and we remain committed to working with AEMO to deliver on that. This is in addition to our generation projects already under construction: 210MW of gas-fired generation in SA and, through the Powering Australian Renewables Fund, 653MW of wind farms in Qld and NSW.”

Mr Vesey said electricity generation is undergoing an increasingly rapid transition to lower-cost, clean energy renewable and storage technologies. This requires the complementary development of flexible, dispatchable gas-fired technology, as well as policies to support these developments.

“We are optimistic that the proposed National Energy Guarantee (NEG) will provide sufficient policy certainty to enable market participants such as AGL to invest with even greater confidence in cleaner, more reliable and more affordable energy generation.”

Stage one of the plan comprises projects required to meet AGL’s committed customer needs: the 252MW power station near Newcastle, a 100MW efficiency upgrade to AGL’s Bayswater Power Station, an agreement for AGL to offtake 300MW of solar capacity from Maoneng Australia’s Sunraysia solar project, the conversion of a Liddell turbine into a synchronous condenser, and up to 20MW of demand response capacity.

Stage two comprises projects required to meet AGL’s potential uncontracted commercial and industrial customer demand, and stage three involves further development that may be required if no other market participants invest in new generation prior to Liddell closing. Both stages two and three are subject to Board approval.

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