AGL plans to mothball one of four units at South Australia’s biggest gas-fired power station, Torrens B, as the influx of large-scale renewable energy and rooftop solar power in the state continues to drive fossil fuels out of the market.
AGL has notified the Australian Energy Market Operator (AEMO) it will take the unit at its Torrens B power station offline in October FY22, citing “challenging conditions” that do not support the viability of operating all four generation units.
The decision follows the continued decline in South Australian forward prices and the volume of new capacity that has come into the market, creating challenging conditions that do not currently support the financial viability of operating all four generation units.
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AGL chief operating officer Markus Brokhof said AGL had made the decision to mothball one unit following careful consideration of reliable supply against the changes capacity requirements and pricing.
“We will continue to provide South Australians with access to reliable and affordable electricity. We have assessed all publicly available information and are confident there is sufficient capacity available to AEMO to ensure system strength,” Mr Brokhof said.
“Torrens Island continues to be an important site for our future generation plans, including its development as a low-carbon industrial energy hub of the future.
“Construction of our 250MW grid-scale battery is planned to begin later this year, making it the first of AGL’s planned 850 MW of batteries to get underway.
“This new grid scale battery along with the Barker Inlet power station that commenced operations in 2019 demonstrates our commitment to playing a leadership role in the state’s energy transition.
“Our decision to mothball this unit has no impact on any of our 400 South Australian jobs.”
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Based on the power station’s maintenance cycle, AGL has identified the B1 unit as the most appropriate to be mothballed and preserved for recall. The planned recall time for the mothballing will be six months.
AGL will continue to operate the remaining three B units, along with the Barker Inlet power station and will review the decision should there be material changes to the market conditions.
At Torrens A, AGL has mothballed three units, with the remaining unit to be mothballed this September, with retirement planned for September 2022.