Loy Yang A closure date brought forward

AGL announced it would be bringing forward the closure of Loy Yang A. file photograph

Michelle Slater

AGL is bringing forward the closure of Loy Yang A to between 2040 and 2045 to meet its new climate commitments as it progresses to splitting the company into two separate entities.

The announcement was made at a half-yearly results presentation to stakeholders this morning, stating it will bring forward the closure of Loy Yang A by three years from 2048.

The company’s coal assets will become part of the newly-formed Accel Energy, while the retail arm will be handed over to AGL Australia.

Following the proposed demerger, AGL Australia plans to reach net zero by 2040 with a 50 per cent reduction in emissions by 2030, and Accel Energy will exit coal no later than 2045.

AGL Australia will underwrite three gigawatts of renewable and flexible capacity.

AGL stated the company plans to “responsibly transition our operations to reduce our environmental footprint” while supporting “our people and communities through the transition”.

This includes re-purposing each of its thermal sites into low carbon energy industrial hubs, and invest in renewable and new generation technology.

AGL Energy chief operating officer Markus Brokhof told The Express that Loy Yang’s closure would be undertaken in a staged approach.

He said the decision to close Loy Yang earlier was independent from any government policy, and no agreements had been made with governments before unveiling the announcement.

“We took this on our own account to reflect the ambition to move to lower our carbon footprint,” he said.

Mr Brokhof said the company would still require a skilled workforce as it transitioned Loy Yang into an energy hub.

He said plans were already underway for a $150 million 200 megawatt grid scale battery at Loy Yang which should be online next year, providing a short-term investment.

Mr Brokhof said feasibility studies were still being carried out into a full commercialisation of the HESC coal-to-hydrogen pilot plant at Loy Yang.

But he stressed this did not mean that Accel would “put all its plans around HESC”.

“We are looking at a commercial phase for each of our hubs, we will develop a master plan, but we still have 18 years to go,” Mr Brokhof said.

“We will develop a fully-fledged hub concept with all the industries we are targeting and infrastructure. The Hunter Valley hub will act as a reference for what we do at Loy Yang.

“This will create a continuation for the workforce, but no one can say what this final set-up will be.”

The news comes as AGL had been seeking expressions of interest for voluntary redundancies at its coal plants including at Loy Yang A.

Mr Brokhof said these were still being evaluated and would announced later this year.

He said the company would still require the coal plant to run reliably and would carry out a planned maintenance schedule, to “invest continuously in the reliability of Loy Yang”.

“We have cost pressures, market prices have drifted lower and we still have to make sure we run an efficient operation,” Mr Brokhof said.

Meanwhile, Loy Yang B operator Alinta Energy had already flagged the potential for an early closure in its most recent sustainability report released last year.

The report stated Alinta was also investigating emission reductions, including net zero carbon scenarios for Loy Yang B to supply “dispatchable, renewable energy to support network stability”.