From Watts Up With That?

Essay by Eric Worrall

Liddell Power Station. By Webaware – Own work, Public Domain, link

“… The end of a relatively low-cost coal contract in 2028, however, could challenge Bayswater’s economics … A reduced operation, such as retaining just one or more of the four units, may be the result …”

‘It can’t be left to the market’: the closure of Liddell power station and uncertainty of the future

In the second of two features, we look at the plan for the site that became ‘history’ before being implemented, and what lies ahead.

When AGL Energy was in a tangle with the Turnbull government over the future of its Liddell power station in 2017, it drew up an extensive scheme listing how it would replace the coal-fired plant with equivalent generation capacity.

The Generation Plan proposed a mix of renewable energy, gas-peaking plants and battery storage, some of which would be on or near Liddell’s site in the New South Wales Hunter Valley. Its sister coal-fired power station, Bayswater, would also get an upgrade.

…

As events transpired, the then prime minister, Malcolm Turnbull, and Vesey both got rolled on the same day, 24 August 2018. “They lost their PM over energy and we lost a CEO,” one AGL insider says.

With Liddell finally shutting on 28 April, business leaders and local officials are hopeful alternative generation projects and manufacturing will eventually fill the site even if few of AGL’s proposed ventures have progressed.

…

Authorities, though, are confident Liddell’s shutdown won’t disrupt the power grid. The Australian Energy Market Operator forecasts the state “will maintain a reliable power supply”, says Penny Sharpe, the state’s new energy minister.

…

Vesey’s successor at AGL, Brett Redman, became much more cautious about the rush to invest in new renewables. Plans for a gas-peaker plant near Goulburn and one in the lower Hunter were scrapped altogether, while investments in new batteries and pumped hydro plants at Liddell or nearby have taken longer than expected, insiders say.

…

However, the area’s transition away from fossil fuels may need to speed up, particularly if Bayswater’s closure is brought forward and the mines start to shut. “The latest is 2033,” Brokhof says, referring to the shutdown timing of the 2,640MW plant.

The end of a relatively low-cost coal contract in 2028, however, could challenge Bayswater’s economics before then. A reduced operation, such as retaining just one or more of the four units, may be the result, people familiar with the plant say.

…Read more: https://www.theguardian.com/australia-news/2023/apr/17/it-cant-be-left-to-the-market-the-closure-of-the-liddell-power-station-and-the-uncertainty-of-the-future

The problem, the coal plant has been run into the ground, and the parent company seems to have gotten cold feet over their assurances to the community they would invest in local green projects – so much so, they dumped the CEO who was pushing the green investment plans.

The government money which everyone was expecting, but which may not have been actually promised, has also not shown up.

The local community, which is (was?) heavily economically dependent on the coal plant, who once had secure jobs, have now been left with empty promises to live on – with the exception of the permanent staff, who have apparently either retired or accepted other jobs in the company which owns the plant.

As I read this I kept thinking of a scene from “Atlas Shrugged” – businesses faltering and collapsing, with nothing to replace them, because impossible political demands were crushing the economy. The failed community still waiting after decades of being ignored, for new investment or government help. The vandalised remains of the ultimate solution to the world’s energy problems gathering dust in the corner of the abandoned ruins of the Starnes Factory.

I’m not saying the town of Muswellbrook in New South Wales, the site of the Liddell Power Plant, is a failed community. They are very much a vibrant community looking for a way forward, which made the mistake of thinking they could rely on promises of investment and support which have yet to materialise.

The left wing Labor / Green coalition which currently runs Australia, which is largely responsible for the hostile political environment which is driving Australia’s coal plants into the ground, might eventually be shamed into directly helping residents of the region directly affected by the Liddell plant closure. But I’m not holding my breath waiting for that to happen.

As the Guardian almost hinted, with their suggestion part of the plant may remain partially open, only the continued availability of cheap, reliable power can genuinely sustain a regional manufacturing economy whose lifeblood is cheap power. Without the economic fundamentals place, all government money can achieve is an illusion of prosperity, which dries up and blows away as soon as fickle politicians turn their attention elsewhere.