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| Thu, 24th Nov 2022 15:16:00 |
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AGL to close South Australia’s main gas power station, citing new grid link and cheaper renewables |
The closure of the Torrens B 600MW gas-fired plant will happen by mid-2026, instead of 2035 as previously plannedAGL Energy will close its main gas-fired power station in South Australia by 2026, citing the completion of a new grid link to NSW that will give the state more access to low-cost renewable energy.
The energy giant, which has been under siege from billionaire activist Mike Cannon-Brookes over its decarbonisation pace, told the ASX on Thursday it would close the remaining three units of the 600 megawatt Torrens Island B gas-fired power station on 30 June 2026.
The closure plan was driven “in part” by the construction of a new transmission line between NSW and SA that is due to begin operating by mid-2026, AGL said.
The decision was not influenced by the recent expansion of the company’s board to add four members proposed by Cannon-Brookes. Discussions between AGL and the SA government have been going on for some time.
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The Australian Energy Market Operator had listed Torrens B as operating until 2035, but an accelerated closure date had been expected.
AGL mothballed one of the plant’s four units last year and the remaining three will have operated for 50 years by the time of the station’s new intended closure date.
The rise of renewables in the state played a role in the decision. During the day time in SA, wind and solar commonly meet most or all of the state’s electricity demand. Rooftop solar panels alone were providing more than four-fifths of the supply by mid-afternoon, the OpenNEM website showed.
The ageing Torrens B plant was less capable of firing up and shutting down to meet the market’s fluctuating needs. AGL’s 210MW Barker Inlet gas-fired station, completed in 2019, is better able to cope with supply demands.
However, recent orders by Aemo for AGL to turn on the Torrens B plant to meet the need for synchronicity and supply demonstrated its ongoing usefulness.
An AGL spokesperson said it is common for two of the plants units to be operated at minimum levels of output to provide stability to the grid. It is “very rare” to have them dispatched any more than that.
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