Replacing Australia’s oldest operational coal-fired power plant with renewables would be AUD1.4bn ($1bn) cheaper than extending its life, a report by the University of Technology Sydney’s Institute for Sustainable Futures has found.
The 2 GW Liddell plant (pictured) in New South Wales, which produces 8 TWh per year and maintains 1 GW of standing capacity, came online in 1973 and is scheduled for shutdown in 2022.
But in September the government told the plant’s operator, utility AGL, to extend its life by another five years after the country’s energy market operator warned that shutting it down could result in a 1 GW capacity shortfall in summer 2023/2024.
The utility was also given the option to sell the plant to an operator that would be willing to keep it open.
In a report released this week, the Institute for Sustainable Futures compared the cost of a five-year life extension for the plant with two alternative scenarios.
According to the report, a five-year life extension for the Liddell plant would cost AUD3.6bn, while AGL’s proposal to replace the plant with a combination of new gas-fired and wind power, energy storage and demand-side management would cost AUD3.3bn.
AGL’s plan includes a 100 MW capacity upgrade at its 2640 MW MW Bayswater coal-fired plant, 750 MW of new gas-fired power, 50 MW of new wind power, 100 MW of demand response and 50 MW of battery energy storage.
The cheapest alternative, the report said, would be a clean energy package including renewables, energy efficiency, energy storage, demand response and flexible pricing, which is estimated to cost around AUD2.2bn. The package would include 1 GW of energy efficiency, 600 MW of new wind power, 250 MW of demand response and 200 MW of flexible pricing.
In terms of emissions, the report found that a five-year life extension for the Liddell plant would produce 40 million tonnes of CO2, AGL’s plan would produce 2.5 million tonnes, and a clean energy package would produce zero.
The Liddell plant has reportedly been plagued with ongoing operational issues. In a September news story, Australian paper the Newcastle Herald reported problems including leaking boiler tubes, deteriorating insulation on high voltage power circuits, an unreliable ash disposal system and corroded coal conveyors.
The paper quoted Kate Coates, Liddell’s general manager, as saying that running the “old lady” plant involved “multiple fronts of challenge … on a daily basis” and that the plant was “on a sliding scale to oblivion”.
Meanwhile, Australia’s News.com said this week that Prime Minister Malcolm Turnbull had been “backed into an awkward corner” by the report’s conclusions.
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