AEMO says there’s enough time to replace coal

gas, AGL's Liddell Power Station
AGL's Liddell Power Station

The Australian Energy Market Operator (AEMO) has said there is plenty of time to replace capacity following the closure of the Liddell Power Station in 2022.

AEMO released a report earlier this month warning of substantial electricity shortfalls in the next decade, with the closure of AGL’s NSW coal-fired power station leaving a 1000MW gap in capacity.

“The power system does not have the reserves it once had, and therefore to balance peak summer demand in real time, targeted actions to provide additional firming capability are necessary to reduce heightened risks to supply,” AEMO chief executive officer Audrey Zibelman said when the report was released.

The analysis shows New South Wales and Victoria could see a heightened risk of USE when the Liddell Power Station closes in 2022.

Prime Minister Malcolm Turnbull has used the report to push AGL to keep the power station open for an extra five years or sell it.

But AEMO is confident the auction it’s developing will attract enough generation to replace the power station.

At a public hearing for a federal inquiry into modernising the electricity grid on Thursday, Ms Zibelman told MPs there was plenty of time for extra capacity to be built.

“This is the longest notice we’ve ever had of a generator retiring,” she said, according to AAP.

“It gives us an opportunity to develop the right kind of auction approach to procure the kind of resources we need.”

She told the inquiry committee the shortfall is expected to be filled by upgrades to existing generators to increase output, battery storage installations and the construction of possible new gas peaking plants.