One of Australia’s largest coal-fired power stations to CLOSE a decade early as major energy provider moves away from fossil fuels
- Power provider AGL to shut down major Loy Yang A power plant ahead of schedule
- Victoria plant was due to close in 2045, but AGL wants to reach ‘net zero’ by 2035
- Loy Yang A is Australia’s most polluting coal-fired power station
- Power stations in NSW will also be scaled back but their closure remains on schedule
Australia’s largest electricity generator, AGL Energy, will go to ‘net zero’ after abandoning plans to split into two companies.
Australia’s biggest carbon emitter on Thursday announced a plan to shut down all coal-fired generation by the end of fiscal 2035, with annual greenhouse gas emissions to cut from 40 million tonnes to net zero.
AGL President Patricia McKenzie said the company will have ‘net zero’ emissions from operations following the closure of all AGL coal-fired power plants.
The plant to close includes Liddell and Bayswater in New South Wales and the Loy Yang A power station that provides almost a third of Victoria’s power, which is due to close a decade before its scheduled closure in 2045.
Loy Yang A power plant in Victoria (pictured) to close 10 years ahead of schedule
“This represents one of Australia’s largest decarbonisation initiatives,” said Ms McKenzie.
The financial implications of bringing Loy Yang’s closure forward include a $700 million impairment charge.
Billionaire shareholder Mike Cannon-Brookes scuppered a planned spin-off of the energy giant, which would have created an energy retailer and ditched former coal-fired operations that would have run longer.
Incoming interim chief executive Damien Nicks said the closures represent a major step forward in decarbonizing Australia’s economy.
Billionaire Mike Cannon-Brookes (pictured) thwarted AGL’s move to separate coal-fired power plants and its retail electricity business into two separate companies.
AGL plans to invest up to $20 billion by 2036 in new renewable energy storage assets, funded by assets on the balance sheet, purchase agreements and partnerships.
This includes a goal to have up to 5 gigawatts of new renewables operational this decade, against a planned pipeline of 3.2 GW.
Nicks said the “ambitious” strategy would provide clear long-term value for AGL and its shareholders.
AGL also updated guidance for the current fiscal year, saying earnings would remain “resilient” with the generator well positioned to benefit from higher power prices.