Australian integrated utility AGL Energy has increased its pipeline of renewable power and storage projects by 500MW to up to 5.8GW.
This is up from 5.3GW in the middle of last year, AGL — Australia's largest electricity generator and retailer — disclosed on 8 February in its results for the first half of the July 2023-June 2024 fiscal year. Projects include between 2.8-3.1GW of renewable capacity — all wind — and 2.72GW of firming capacity from battery energy storage systems (BESS) and pumped-storage hydropower. FIDs are targeted mostly for the 2026 and 2027 fiscal years.
Reducing coal power generation
The company is targeting to add 5.4GW of new renewable and firming capacity before the end of 2030 and 12GW by 2036, which will help it to replace lost capacity from the planned closures of its two remaining coal-fired power plants.
AGL plans to close the 2,715MW Bayswater coal-fired power plant in New South Wales (NSW) between 2030-33 and the 2,210MW Loy Yang A facility in Victoria on 30 June 2035.
Its coal-fired generation fell sharply to 13.15TWh in July-December 2023 from 15.4TWh one year earlier, following the closure of the1,680MWLiddell plant in NSW last April. Gas-fired output more than halved to 390GWh from 800GWh over the same period, while renewable generation fell slightly to 2.78TWh from 2.88TWh.
AGL has moved ahead with plans to increase the flexibility of the Loy Yang A and Bayswater coal-fired plants, to cope with increasing renewable penetration in Australia's National Electricity Market (NEM). Bayswater's four units will be able to operate at a minimum average of around 800MW, a reduction of around 70pc from the total 2,715MW capacity, which could be lowered even further down to approximately 680MW. And the four Loy Yang A units will be able to operate at as low as around 1,200MW on average, 45pc lower than its total capacity. These flexibility upgrades have enabled AGL to reach A$12mn of portfolio benefits in July-December 2023 through lower coal usage and more efficient operations, it noted.
Apart from its own 5.8GW project pipeline, AGL has almost 1GW of new capacity in operation, contracted or under construction. It also has over 3.5GW of potential capacity from Australian power firm Tilt Renewables, where it has a 20pc partnership. It signed a power purchase agreement (PPA) last year to buy 45pc of Tilt's Rye Park wind farm project, equating to 178MW of capacity or 513 GWh/yr, and later signed a separate 15-year deal with technology giant Microsoft for the sale of the corresponding renewable energy certificates, such as large-scale generation certificates (LGCs).
The utility commissioned the 250MW/250MWh Torrens Island battery last August in South Australia and is currently testing the 50MW/50MWh Broken Hill battery in NSW. It has also started building its 500MW/1,000MWh Liddell battery in NSW, which is expected to come on line in mid-2026.
