$100 million a year to keep half of Liddell coal-fired power plant alive

The company gave the market seven years’ notice in 2015 that it would shut the plant, but bowed to pressure last August to extend three units to April 2023 – just after the March state election of that year.

Measures to extend the life of Liddell were notably absent from the recent $3 billion deal between the Morrison and Berejiklian governments to boost electricity grid investments while lifting gas supplies in the NSW market.

Insiders said AGL and the NSW government were “on a unity ticket” in opposing the further extension of the plant’s life, not least because of the risk to workers of mechanical failure at the ailing plant but also because cheaper forms of electricity are available.

The plant’s reliability would also most likely worsen, meaning power supplies couldn’t be counted on when most needed, they said.

“We are waiting on the final report of the Liddell Taskforce and will consider its findings once received,” a NSW government spokesman said.

Federal Energy Minister Angus Taylor told Parliament during question time on Monday that he, too, was awaiting the final report.

The government’s policy, though, remained that “as generators come to the end of their natural lives, we want to see life extension or like-for-like replacement”.

“This is all about adding in more supply to the electricity market whilst we ensure that the existing supply is managed very carefully,” he said.

Sky News earlier reported the $300 million figure as the cost of the extension to 2026, adding that AGL “did not want to come up with the funds”.

AGL declined to comment on the figure, saying the material it had provided to the taskforce was “commercial in confidence.

However, in 2017, the company estimated extending 1000MW of capacity of Liddell for five years to 2027 would incur capital costs of $920 million.

With an original “nameplate” capacity of 2000MW for its four units when it was opened in the early 1970s, the plant is now rated at four units of 420MW each because of continuing technical issues.

The AGL is sticking by its public statement that it planned to close the first unit of the plant in April 2022 and the remaining three a year later, a spokesman said.

With reporting by Mike Foley

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