AGL Energy has rejected Turnbull government pressure to extend the life of the coal-fired Liddell power station and instead revealed a $1.36 billion plan to replace it with electricity generated from gas, wind, solar and other supply.
In a blunt rebuff of Canberra’s request for the 45-year-old Hunter Valley plant to be either sold or have its life extended, the country’s largest electricity producer stuck with its 2022 closure date and revealed that electricity from the portfolio of proposed new plants would cost 20 per cent less to produce.
The scheme, released exclusively to AFR Weekend ahead of its publication on Saturday, has been handed to government days before the 90-day deadline the Turnbull government set for AGL to explain how it would replace the 1680 megawatts of baseload capacity that will be lost once Liddell closes.
$83MWh levelised cost. The historical average for prices in NSW is $30MWh, right up until 2015. The key is the price of gas which AGL is also planning to ship in from the US at today’s price of $13Gj, 400% above its historical average price and combine that with much cheaper but intermittent renewables. Remember that gas sets the price in the wholesale electricity bid stack.
This is not a power plan. It’s a plan to gouge the east coast economy to death.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
