On Thursday, the CEO of AGL Energy, Graeme Hunt, said that even when the company will advance the plans to close its coal-fired plants, there is a slim chance that the phase-out would be in accord with the time pressures from climate activists.
Hunt said that the shutdown would unlikely happen before 2040, while the climate activists demand Australia’s biggest carbon emitter to shut its coal-fired power plants by 2030.
He argued that the country’s power grid would still require coal well beyond 2030. Moreover, the company cannot make unilateral decisions to close coal plants without having dire consequences, both in terms of the affordability and reliability of electricity in the National Electricity Market (NEM).
AGL plans to phase out its coal-fired plants by 2048 when its Loy Yang A plant is scheduled to close. The plant’s technical life is until 2048 while the economic life will no doubt be shorter than that.
“Whether it shuts six months or six years earlier than 2048 was hard to predict, but it was unlikely to be as much as six years earlier as all the power capacity needed to replace it would not be in place by then,” Hunt said.
For Australia to achieve a target of 90% renewable power by 2040, consultancy PricewaterhouseCoopers estimated that it needs to invest around AUD53 billion (USD39 billion) in renewables to replace coal- and gas-fired plants.
Meanwhile, the government instead considers making capacity payments to generators that are always online to ensure stability in the grid when wind and solar are unavailable, which could prolong the life of coal-fired plants.
