GL announces early closure of Loy Yang A Power Station
Energy giant AGL has announced that it will close the Loy Yang A power station in Victoria's Latrobe Valley up to 10 years earlier than planned, expected to close at the end of 2035 financial year.
AGL notified the stock exchange of the move this morning.
The company is on track to close its Bayswater coal plant in the NSW Hunter Valley between 2030 and 2033, according to the statement.
The Loy Yang A power station is one of Victoria's newest coal-fired power stations and produces 2,210 megawatts MW of electricity, about 30 per cent of the state's total.
It was initially scheduled to close by 2048, but AGL announced in February 2022 that it would get out of coal between 2040 and 2045.
The closure date of Loy Yang A in 2035 seems to have brought that schedule even further forward.
In a statement to the stock exchange, AGL's interim chief executive Damien Nicks said that the early closure of Loy Yang A Power Station will prevent up to 200 million tonnes of greenhouse gases being emitted, compared to the previous Loy Yang A Power Station closure date.
AGL's future portfolio will be 'demand driven', meaning that it will focus on capacity that responds to what customers need, with the majority of new supply expected to come from wind and storage, including batteries. Greenpeace Australia Pacific CEO David Ritter welcomed the move and said Australia was moving at lightning speed towards renewables This is a change that will make a real difference to the climate.
The company planned to run the filthy and decrepit Loy Yang A until 2048 when Greenpeace started piling pressure on AGL in early 2021. The commitment to close it by 2035 has real, tangible benefits for Australia and the world. AGL planned to split its business into two companies - AGL Australia and Accel Energy - but the proposed split was abandoned in May 2022 because it didn't get enough shareholder support.
The proposal was not implemented, which resulted in AGL chief executive Graeme Hunt and chairman Peter Botten leaving the company.
Late last year, AGL announced plans to slash its coal and gas workforce due to growth in the renewables sector.
AGL offered voluntary redundancies at its Victorian, South Australian and New South Wales plants.
Bruce Mountain, the director of the Victorian Energy Policy Centre, said the closure of Loy Yang A would put about 600 staff out of work.
He said that those in favor of the transition to clean resources will be celebrating, but I think some of the staff who work at the power station and don't have the option to transition will be concerned about the implications for them.
Mountain said private shareholders were driving the company to transition from coal-fired power to renewable energy.
Victoria's energy minister, Lily D'Ambrosio, said the government would work with AGL to help the workers affected by the plant's early closure through retraining, reskilling and new work opportunities.
AGL made a statement on the same day as two reports highlighted energy affordability as a major challenge in Australia's transition from fossil fuels to renewable power.
The Australian Energy Regulator's AER State of the Energy Market report warned high inflation and the rising cost of network investments could add to the pain of high energy prices in the near term.
The Health of the National Energy Market NEM report, released simultaneously, said that the best strategy to improve energy affordability was massive physical investment and purposeful, coordinated policy reform.