First announced in August 2019 the plans to close the ageing power plant have become a major political issue with claims the closure will leave the national power grid short of baseload energy.

The Federal government has said it may build a gas generator in Kurri to provide reliable power once Liddell ceases output. But this proposal has been rejected by a number of energy experts who argue battery storage and pumped hydro are far cheaper options.

AGL will be converting the Liddell site to an Energy Hub, as the company begins twelve weeks of transition planning for the Liddell power station, in preparation for the station's closure in 2022-2023.

Through a competitive procurement process, engineering contractor, Delta Group has been awarded the tender for the first stage of closure, decommissioning and demolition planning for the Liddell power station.

AGL Chief Operating Officer Markus Brokhof said this is an important milestone as we prepare for Liddell's retirement.

"For the next three months, AGL and Delta will establish appropriate documentation, processes and systems to ensure an orderly and safe closure of the stations units," Mr Brokhof.

"Delta will help identify specific risks and controls for decommissioning, asset salvage, remediation and demolition.

"For 50 years, the Liddell power station has produced around 8000 GWh of electricity annually, powering more than one million average Australian family homes.

"The station is now nearing the end of its technical life and our transition program is about ensuring the safety of our people and preparing other sources of generation to continue delivering reliable electricity.

"Preparing for Liddell's closure is a bittersweet moment for AGL - the station and its people play such an important role in Australia's energy supply but equally we're excited to take these steps as we transition and enter a new era for the business.

"Australia's future energy needs will be delivered through a combination of technologies - gas, hydrogen, pumped-hydro, renewables and firming technologies and industrial developments.

"We are continuing to work on a number of plans for the Liddell site as we develop an Energy Hub which include solar storage systems, grid-scale batteries and a waste to energy facility.

"We are looking forward to progressing these plans which will provide essential jobs and economic activity to the region while also supporting Australia's energy transition and AGL's Climate Statement commitments which include net-zero emissions by 2050."

Delta Group CEO Jason Simcocks said the opportunity to partner with AGL on transition planning works for the Liddell power station realises another goal in the Group's expansion of its industrial contracting services.

"We were delighted to be selected for this important stage of the Liddell power station project and look forward to working with AGL," Mr Simcocks said.

"This opportunity complements our work in Victoria's Latrobe Valley at the (former) Hazelwood Power Station for ENGIE Australia and we hope to bring a variety of skills and experiences to support AGL's transition program and the Hunter Valley community."

In August 2019, following an independent assessment AGL informed AEMO that the first unit at Liddell will close in April 2022. The remaining three units will close in April 2023, supporting system reliability throughout the 2022-23 summer months.

The first stage of these works will conclude in mid-July 2021.