Muswellbrook's Liddell coal-fired power station set to go under the microscope again

A CLEAN energy package, including battery storage across the Hunter, would slash climate pollution and cut hundreds of millions of dollars from the cost of keeping Liddell coal-fired power station open, new economic analysis has shown.

Replacing Liddell with clean energy, demand management and energy efficiency would be more than $1.3 billion cheaper than the Turnbull Government’s push to keep the 50-year-old plant open beyond its 2022 closure date, the University of Technology Sydney’s Institute for Sustainable Futures said in a report released on Monday.

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Even an expanded clean energy package, that would see batteries in homes and businesses across the Hunter, would be $400 million cheaper than keeping Liddell open, the Beyond Coal: Alternatives to Extending the Life of Liddell Power Station report said.

The clean energy package, estimated to cost $2.2 billion over five years, would be cheaper than Liddell owner AGL’s plan to replace the power station with gas, wind, batteries and demand management, at an estimated cost of $3.3 billion, and extending Liddell’s life beyond 2022 at a cost of $3.6 billion for the five years.  

The Australian Conservation Foundation-commissioned report compares the pollution and economic costs of the three scenarios.

It found a stark difference between climate pollution costs, with the clean energy package producing no climate pollution, compared with 40 million tonnes by extending Liddell, and 2.5 million tonnes for AGL’s proposal.

Australian Conservation Foundation chief executive Kelly O’Shanassy said the results showed Australia’s elected representatives were holding the country back.

“Australia desperately needs a comprehensive climate change policy that will facilitate the rapid transition to a clean energy future,” Ms O’Shanassy said.

“Any climate change and energy policy, be it the National Energy Guarantee or another proposal, must be designed to encourage as much clean energy and smart technology as possible, and not prop-up polluting coal plants that are damaging our planet.”

Institute for Sustainable Futures research director, Chris Dunstan, said clean energy solutions to replace Liddell could set a powerful precedent for Australia’s longer-term energy transition from coal.

Australia desperately needs a comprehensive climate change policy that will facilitate the rapid transition to a clean energy future.

Australian Conservation Foundation chief Kelly O'Shanassy

The report noted as much as 60 per cent of Australia’s coal fired power stations are expected to reach retirement age in the next 15 years.

It argued a “just transition” for the Hunter was needed to ensure “decent work, social inclusion and poverty eradication” as the region shifted from coal to renewable energy in coming decades.

“It is becoming obvious that the closure of the Liddell Power Station will only be the beginning of a broader transition in the Hunter Valley. Other fossil fuel-fired power stations will likely be phased out in the coming decades,” the report said.

It acknowledged the closure of Liddell posed significant problems, but argued shortfalls during peak summer periods could be better addressed by a clean energy package mix than keeping Liddell open.

Keeping Liddell open also failed to address electricity affordability issues within the current policy framework, the report said.

“Some of the lowest cost options for replacing the capacity and energy of Liddell are beyond the control of AGL and require government policy setting. Energy efficiency, demand response and time varying pricing all require effective government policy to ensure they have a fair opportunity to compete, and provide least-cost outcomes,” the report said.

A report released on Monday by Australia’s chief scientist, Alan Finkel, The role of Energy Storage in Australia’s Future Energy Supply Mix, found the required investment in energy security and reliability over the next decade would be minimal, even if wind and solar energy use moves far beyond levels contemplated by the Energy Security Board.