Energy giant AGL has announced it will close its Liddell coal generator in 2022 and replace it with renewable energy sources and gas peaking power.
The company, which was under government pressure to keep the coal-fired power station open, instead opted to embrace renewable options.
AGL said it would move to a mix of high-efficiency gas peakers, renewables, battery storage and demand response, and by doing so, would shrink its carbon footprint by 17.6 per cent.
An assessment of the plan found the replacement generation is more affordable at $83/MWh, compared with extending Liddell at $106/MWh, the company said.
The plan was also found to deliver reliable, dispatchable power for longer, due to a longer asset life of 15-30 years, compared with a Liddell extension of five years.
AGL said it was already forging wind and solar contracts, with further investments in renewables on the cards.
“This plan demonstrates that old power plants can be replaced with a mixture of new, cleaner technology, while improving reliability and affordability,” AGL chairman Graeme Hunt said.
“Decisions for the investments are staged to enable flexibility to respond to the changing needs of the market and improvements in technology over the next five years.”
