Australian utility AGL Energy has brought forward the planned closures of its coal-fired power plants to 2035, meaning that its greenhouse gas (GHG) emissions will fall from around 40mn t/yr of carbon dioxide equivalent (CO2e) in the 2020-21 fiscal year to 30 June to net zero when they all shut.
AGL has brought forward the closure of the 2,210MW Loy Yang A brown coal-fired power plant in Victoria to 2035 compared with 2045, which was only revised in February from a previous target of a shutdown in 2048. Loy Yang is one of the largest emitting power plants in Australia with GHG emissions of 19.15mn t of CO2e in 2020-21, according to data from Australia's Clean Energy Regulator.
AGL kept the closure timing of its 2,640MW Bayswater black coal-fired power plant in New South Wales (NSW) to between 2030-33, which was brought forward from a previous target of 2036 in February.
AGL is already in the process of fully closing its 1,680MW Liddell black coal-fired power plant, also in NSW, by April 2023.
"With the closures of Bayswater and Loy Yang A, we have also announced an ambition to meet projected customer energy demand with up to 12GW of new firming and renewable assets before 2036," said AGL interim chief executive Damien Nicks.
The majority of new electricity supplies will come from wind and storage, including batteries and will require a total investment of up to A$20bn ($13bn) by 2036 that will be funded through its balance sheet, take-off agreements and partnership, Nicks said.
"As part of this ambition, we've set an interim target of 5GW of new renewables and firming in place by 2030, expanding upon our existing 3.2GW pipeline of projects," Nicks said.
The accelerated shutdown of AGL's coal-fired power plants follow the emergence this year of Australian billionaire Mike Cannon-Brookes as the largest shareholder of the Australia utility with a 11.28pc stake. He used his stake to vote against and ultimately halt the proposed demerger of AGL into two companies and a commitment to review its coal assets.
The accelerated targeted closure date of Loy Yang A will see AGL book a non-cash impairment charge of about A$700mn after tax.
Gas-fired future
AGL expects to provide a further update on the long-term status of its Torrens Island gas-fired power plant in South Australia. AGL retired the last of its units at the 480MW Torrens Island A gas-fired plant and is only operating the 800MW Torrens Island B gas-fired plant.
"The current economic environment remains challenging for AGL's Torrens Island power station," AGL said. The South Australia-NSW interconnector is planned to be fully operational in mid-2026, which will further affect gas-fired generation in South Australia, it said.
The interconnector is expected to stimulate the construction of more renewable energy in both states, putting pressure on existing power plants.
AGL's announcement comes a day after the Queensland state government said its state-owned utilities will stop their reliance on burning coal by 2035, as part of efforts to reduce GHG emissions that also includes sourcing 80pc of the state's electricity from renewable sources.
