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Thursday, September 29, 2022

AGL Energy brings forward Loy Yang A coal power plant closure from 2045 to 2035

AGL Energy has announced the bringing forward of the closure date for the Loy Yang A coal power station in the LaTrobe Valley from 2045 to 2035. 

Such action was not unexpected given the Victorian Premier's announcement on Tuesday setting Victorian energy storage targets, and with continual growth in grid solar and wind farms and the planned construction of offshore wind. In March this year the Victorian Government set offshore wind targets of 2GW by 2032 and 4 GW by 2035.

But the 2035 closure date is still not ambituous and not in keeping with Paris climate target for phasing out coal. Bronya Lipski from Environment Victoria argues that a 2032 closure is in line with AEMO step change scenario. The Greens in the upcoming state election argue that all Victoria's coal plants should be phased out by 2030 with ramping up the speed of renewables and storage construction.  

Loy Yang A power station, owned by AGL Energy, is one of Victoria's newest brown coal-fired power stations coming online progressively between 1984 and 1988 to produces 2,210 megawatts (MW) of electricity, about 30 per cent of the state's total. 

Loy Yang A is colocated with Loy Yang B, owned by Alinta Energy, with a capacity of 1,070 MW which entered service between 1993 and 1996 and currently scheduled for closure in 2046.

The third existing coal power station in the LaTrobe Valley is Yallourn, owned by Energy Australia, with a capacity of 1,480 megawatts and scheduled for closure in 2028.

Environment Victoria’s Policy and Advocacy Manager Bronya Lipski highlighted in a statement that the closure of Loy Yang A still lacks ambition and is inconsistent with Paris temperature targets:

 “This timeline doesn’t meet the expectations of AGL shareholders who voted last year to demand the company adopt Paris-aligned climate targets. AGL needs to explain why it continues to resist the wishes of not only its shareholders but most Australians who want urgent action on climate.

“Announcing timelines inconsistent with the Paris agreement and the wishes of its shareholders only prolongs uncertainty for the Latrobe Valley community as inevitably these will come forward. 2035 is an improvement but it is still not credible.

“According to analysis using data from the Australian Energy Market Operator’s (AEMO) Step Change Scenario all coal in Victoria should close by 2032.

“So AGL’s prediction not only fails to commit to a target consistent with the Paris targets, but it also fails to meet the expectations of Australia’s own impartial energy market operator."

We saw yesterday the Queensland Premier announce a jobs and energy plan which would see reliance on all Queensland coal power stations phased out by 2035, with the power stations transitioning to renewable energy hubs, and with a jobs guarantee as part of the transition for the workers and communities.

The Victorian Government has already established the La Trobe Valley Authority which will be an important part in workforce and community transition.

Transition for a workforce and community

Latrobe Valley long time coal worker Tony Wolfe said this announcement confirms the accelerating move away from coal in Australia.

“The workforce and community are now left with no other option than to rally together and embrace the new technology if we want to continue our proud history of electricity generation for Victoria in the Latrobe Valley.

“This is not a time for push back or negativity. There is so much to be done to ensure adequate mine rehabilitation is planned, new jobs are identified, skills upgraded, and an entirely new workforce is mobilised to roll out the renewable projects in planning within our region,” he said.

The closure of the plant will affect about 800 staff. So it is important that AGL Energy works with the local community, LaTrobe Valley Authority and State Government for retraining, relocating and new work opportunities.

Energy Minister Lily D'Ambrosio said in a statement:

"Today’s news will be difficult for those who have powered Victoria through Loy Yang A for decades – and as we work with AGL to manage this transition, we’ll be with every worker, every step of the way.

We will work with AGL to help locals retrain, reskill and find new work opportunities close to home as we transition the state to cheap, clean renewable energy.

We’ve invested almost $2 billion to create more than 4,000 extra jobs in the Latrobe Valley’s workforce since 2014 – and in the coming months and years, our focus will be on helping Loy Yang A workers, their families and the Latrobe Valley community navigate the transition."

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