Author: Cole Latimer
AGL will spend about $900 million to buy wind farms as part of a plan to replace the power lost when it closes the controversial Liddell coal-fired power plant.
The company will this week announce an expression of interest to replace the 8 terawatt hours of power it generates from its NSW Liddell plant every year and is turning to a mix of different sources – including wind and solar – as it brings more renewable energy on board.
“We’re going to the market to procure around 500 megwatts of wind projects, this could be through two or three projects of between 250 to 300 megawatts, or one large 500 megawatt project,” AGL’s general manager for power development Dave Johnson said.
“This is us putting the rubber on the road in terms of replacing Liddell,” Mr Johnson said.
“It’s a bit unusual for a company like AGL to go down the expression of interest path but we’re doing it so we can get down to powering the future.”
Last year AGL announced its intention to shut down the Liddell power plant in 2022, a move which swiftly brought the wrath of the federal government as it sought to strong-arm AGL into extending its life for five years.
AGL stared down the push and rejected reports that it may sell the power station to the NSW state government. It announced a plan to shut down Liddell and replace three quarters of the electricity it generates with renewable energy.
AGL’s approach to the market for more renewable power comes as the energy security board is expected to release its latest modelling for the National Energy Guarantee as soon as this week.
Of the eight terawatt-hours of annual electricity now supplied by Liddell, six will be generated by renewables, one with gas, and one from other sources including through an upgrade of AGL’s Bayswater coal-fired power station.
While AGL has set a price target range of around $900 million Mr Johnson told Fairfax Media, “I don’t think financing will be a limitation.”
He said AGL was looking for projects that were at the point where the company only needed to source a contractor to build it and arrange funding.
It would have to be something well progressed through the planning process, or already permitted and with land access agreements in place, and while there are no specific areas within NSW being targeted, Mr Johnson said it would need to have at least three years of wind data and be as close to transmission infrastructure as possible.
AGL already has the 200 megawatt, $450 million Silverton wind farm located in western New South Wales under construction and has started building the 453 megawatt Cooper Gap wind farm in Queensland, which will be both Australia’s and the Southern Hemipshere’s largest single wind farm.
“We’ll be going to market this week and expect to hear back [from interested parties] within a month, it’ll be interesting to see the projects under development on offer,” Mr Johnson said.
AGL is also considering pumped hydro potential in the Hunter Valley, which would provide more “firming” options to overcome renewables intermittency issues, meaning how to generate power when the wind isn’t blowing and the sun isn’t shining.