AGL is facing increased pressure to sell its aging Liddell power station, after gas and electricity retailer Alinta Energy made a $250 million offer to buy the plant.
Liddell is slated to close in 2022, and AGL has said it isn’t worth investing the money that would be needed to keep the 46-year-old, 1,680MW power station open beyond that date.
Alinta parent company Chow Tai Fook Enterprises this week said it would give AGL $250 million for the energy generation assets and related equipment at Liddell.
AGL has continuously dismissed calls to sell the plant, as it needs to continue supplying energy to existing customers while it develops a renewable power generation and battery storage facility to replace Liddell’s capacity from 2022.
Selling Liddell would also go against AGL’s best interests in the future, given it provides a significant portion of New South Wales’ baseload power generation.
A retailer, such as Alinta Energy, keeping the plant open would therefore be a detriment to AGL’s retail business in the future.
The Coalition has repeatedly urged AGL to either refurbish Liddell or sell it to someone who will.
Prime Minister Malcolm Turnbull has said the closure of Liddell would leave a 1000 MW gap in the nation’s baseload power, and the potential repeat of the energy price hikes seen after Hazelwood power station shut down in March last year.
While Turnbull can’t force AGL to sell, he and energy minister Josh Frydenberg have done what they can to pressure the energy firm to make a move.
“It’s important that AGL gives proper consideration to the offer, given Alinta’s stated intention to continue operating the plant beyond 2022,” Frydenberg said this week.
Turnbull reportedly called AGL chairman Graeme Hunt early in April when Alinta first began discussing an offer for Liddell.
“We know that there is going to be a shortage of dispatchable power, electricity, in NSW between Liddell closing and the Snowy 2.0 coming online which is to be 2024, 2025,” the PM told the media on April 4.
“So there’s at least two, three years where there is a risk of a shortfall in dispatchable electricity in NSW. I spoke to the chairman of AGL again last night and … I said to him, ‘Look, it’s in the public interest, it’s in the community’s interest … it’s in AGL’s interests to be seen to be a responsible player in the electricity market to keep this power station going for a few more years to make sure there isn’t a shortfall’.”