Malcolm Turnbull says he's talking with AGL but company firm on end of coal

Closure: Liddell power station near Muswellbrook. The station's future is a national issue as its closure in 2022 has prompted increasingly alarmed predictions of a looming energy crisis across the eastern states.
Closure: Liddell power station near Muswellbrook. The station's future is a national issue as its closure in 2022 has prompted increasingly alarmed predictions of a looming energy crisis across the eastern states.

AGL Energy says it has made no commitment to sell Liddell power station after Prime Minister Malcolm Turnbull on Tuesday said the company may be open to selling to a buyer willing to keep it open beyond 2022.

In a statement to the Australian Stock Exchange on Wednesday AGL reaffirmed comments it made on Tuesday and Monday about closing Liddell and “getting out of coal”, after Mr Turnbull told parliament he had had discussions with the company about extending operations until at least 2027.

”AGL recognises community and government concerns in relation to energy security, as highlighted in the Australian Energy Market Operator’s 2017 Electricity Statement of Opportunities published yesterday, and continues to assess the capacity that will be needed post 2022 to replace Liddell,” the statement said.

“AGL will continue to engage with governments, regulators and other stakeholders to deliver appropriate outcomes, but notes that the company has made no commitment to sell the Liddell Power Station nor to extend its life beyond 2022.”

The company said its aim was to “prosper in a carbon-constrained world and build customer advocacy as our industry transforms”.

Liddell power station could remain open beyond its 2022 closure date under a proposal to use gas in a re-purposed facility, some Hunter community leaders have been told.

Upper Hunter MP Michael Johnsen said he had been briefed on a tentative gas future for the site as part of AGL’s broader rehabilitation discussions. An AGL spokesman said there were “no specifics” as it pursues a rehabilitation and transition plan.

Hunter MP Joel Fitzgibbon called Mr Turnbull’s comments on Liddell increasingly desperate, referring to how Mr Turnbull described his request to AGL to extend the life of Liddell beyond 2022 as “discussions”.

“We know AGL slapped down Barnaby Joyce when he raised the question of building new clean-coal generators. He was told it was too expensive, would take too long, and the company would not ask its shareholders to risk it,” Mr Fitzgibbon said.

“It's even more unlikely AGL - which has been running television commercials promoting its withdrawal from coal generation - would invest the money needed to extend Liddell. Then again, I suppose it depends on how much taxpayers’ money the Prime Minister is prepared to throw at AGL to run the plant for another five years.”

In a statement after Mr Turnbull’s comments AGL said the company was committed to the closure of Liddell in 2022, and was “actively assessing what capacity will be needed post-2022”.

“We, along with other market participants, will consider AEMO’s report in light of these plans,” AGL said.

On Monday night AGL chief executive Andy Vesey reaffirmed his position on Liddell by tweeting: “We’re getting out of coal.”

Mr Fitzgibbon said he had not been briefed on any gas proposal for Liddell, but one of the biggest issues was the availability of gas.

“I’ve been advocating gas generation in the Hunter as a transitional fuel. I strongly support that approach either through retrofitting or new gas-fired generators. We have the land, the skills, and the transmission lines but we must get more gas to the east coast market,” he said.

In August AGL released a rehabilitation program for Liddell designed to attract proposals from around the world for the “post coal” use of the power station assets. The most economic option would not be coal or baseload gas, but a mix of energy from wind and solar supported by mechanisms including battery storage.

In a statement released on Tuesday night, AGL said it was committed to the “decarbonisation of our generation portfolio and doing this in a measured and orderly way”.

“This means not extending the operational life of our existing coal fired power stations,” a spokesperson said.

“We are committed to working with our employees and we have already started working with local business, industry, government, and educational institutions to identify new investment prospects, encourage economic diversification, and create new employment opportunities in the Hunter.

“Our rehabilitation report outlines the process we will implement to identify possible reuse of the Liddell site for alternative energy or industrial activities, with subsequent employee opportunities.

“We have not identified a specific post closure solution. The AGL rehabilitation report highlights the commencement of the transition project, designed to identify potential opportunities for the Liddell power station post 2022.”