The AFR reports that Alinta is finalising its bid for Liddell, energy minister Josh Frydenberg says by the end of April, so any day now. That was in response to the announcement by AGL the day before that it will build the 252-megawatt gas-fired plant near its Newcastle Gas Storage Facility, completing construction at the end of 2022, for the cost of $400 million:
Above is an artist impression of a similar facility in South Australia.
Frydenberg was not impressed.
Indeed this table from the post AGL doubles down on Liddell plan shows the gas generator as belonging to Stage 1 of the $1.4 billion replacement plan:
The centre-piece for those looking for a steady supply of energy is arguably the 500MW gas plant in Stage 2, which would produce 500MW, rather than the 750MW renewables component in Stage 2+3 which would produce 40-600MW under “high demand”.
AGL’s problem appears to be that to justify spending on such a large plant it needs commitments from major customers to buy the electricity. The problem appears to be this:
- The minister also pointed to the support of large industrial companies such as Tomago Aluminium, BlueScope Steel, Brickworks and others that have come together under the banner of Manufacturing Australia “and are working with Alinta to purchase this Liddell plant”.
“Working with Alinta” is probably over-stating the case. Ben Eade, CEO of Manufacturing Australia said (reported on 4 April):
- any firm contracts were a long way off, describing the body’s stance as “support in principle of any credible party that wants to run that asset beyond 2022.”
We are told that Alinta chief executive Jeff Dimery has been given the nod from the company’s owner, Chinese conglomerate Chow Tai Fook Enterprises:
- to explore a potential $1 billion investment that would include the acquisition price and spending needed to keep the plant running an extra seven years until 2029.
Alinta’s estimate of what it takes to restore Liddell is bound to be less than the $920 million AGL claims as necessary, but it is hard to see Alinta putting enough on the table to temp AGL to sell.
It’s worth noting that Manufacturing Australia’s needs may well be described as ‘baseload power’ and they probably fancy that coal will be cheaper than gas. They may have overlooked the fact that coal is in short supply. As I posted last September:
The crunch point is that NSW generators have to burn more coal than their long-term coal supply contracts cater for. So supply is tight for a number of their power stations. Miners are flat strap supplying their export contracts, there are some problems with rail capacity, and Glencore is having a barney with the CFMEU.
Angela Macdonald-Smith reported on 26 April:
EnergyAustralia, another rival to AGL, is also progressing plans for a new gas power plant at its Tallawarra site south of Sydney.
Hard to know how relevant that is. From the AEMO site that monitors energy generation:
That was at 18 March this year. Plenty of new power proposed, especially wind and solar. Here is the corresponding table:
The table shows 2000MW of coal to be withdrawn. No doubt that is Liddell. If so it is probably only 1680MW at best, the capacity rating given to Liddell by AGL.
Against that there is 100MW of coal committed, no doubt Bayswater, plus 29MW ‘other’.
The table shows 975MW of gas proposed. Chances are the 750MW of that consists of the two AGL Liddell replacement gas stations.
The 2000MW of hydro power is likely to be Snowy 2.0, which is not mainstream power, but should probably be seen in relation to rooftop solar contributing to the grid (not shown) and firming in part the combined 10,749MW of wind and solar proposed. There is also 333MW of biomass and ‘other’ being proposed.
After Liddell the only coal power station likely to close before 2032 is Vales Point, an old clunker sold in 2015 by the NSW government to Sunset Power International for a token $1 million, which then-NSW treasurer Gladys Berejiklian said was “above its retention value”. It now is valued on its new owners books at $730 million, having produced $380 million worth of electricity sales in the past financial year.
Remember that AEMO calculated that if AGL only expanded Bayswater by 100MW and completed the Silverton wind farm, and nothing else new came on board, the shortfall would be 850MW based on a world champion security standard of 0.002% in outages in any one financial year. Proposed gas and biomass alone make up 1308MW of what should be ‘baseload-like’ power.
The only way a crisis in supply will emerge is if the Commonwealth through the National Energy Guarantee (NEG) is actually successful in stopping renewable energy development in its tracks. Then a ‘crisis’ will be the prospect of 200,000 homes losing power for up to five hours once in every three years, no more than a couple decent SEQ summer storms.
There is a lot of humbug being spoken in the politics of Liddell, which would be funny if not so serious.
Update: As an update, from RenewEconomy AGL rejects Alinta bid for Liddell, Coalition goes nuts.
There is further discussion on the Climate clippings 223 thread.