AGL Energy has received an official cash offer from Alinta Energy to acquire the Liddell Power Station.
Alinta and its Hong Kong-based owner Chow Tai Fook Enterprises offered $250 million for the coal-fired power station and site.
AGL said it is assessing the “non-binding highly conditional” offer.
“No assurance can be given that any transaction will result from the offer,” AGL said in a statement.
“AGL has not sought to sell the Liddell Power Station, as it requires Liddell to provide energy to its customers until 2022 and for repurposing as part of its NSW Generation Plan post 2022.”
Prime Minister Malcolm Turnbull has put pressure on AGL to sell the power station after Alinta expressed interest in acquiring the asset in April.
The power station is set to be retired in 2022, but the Federal Government wants AGL to extend the life of the power plant by five to seven years avoid a predicted power shortfall.
“Alinta Energy has fulfilled our commitment and submitted a nonbinding offer for the Liddell power station to AGL, which we believe represents a compelling commercial proposition for AGL shareholders,” an Alinta Energy spokesperson said.
“We won’t be in a position to comment further until AGL has considered the offer and responded.”
In March, the Australia Energy Market Operator (AEMO) said closing Liddell in 2022 would leave a generation capacity shortfall of 850MW.
However, AEMO said if all three stages of AGL’s proposed post-Liddell plan were delivered “the resource gap will be eliminated”.
AGL’S three-part transition phase includes a mix of high-efficiency gas peakers, renewables, battery storage and demand response as well as the efficiency upgrade at Bayswater Power Station.
“More responsive and flexible energy sources are better suited to a market in which there is cheap, variable energy,” AGL said.
“These sources include gas peaking plants and energy storage such as pumped hydro and batteries.
“Our Liddell replacement plans envisage the site as a renewable energy storage and integration hub.
“AGL’s replacement plans have been assessed by independent consultants as being both significantly cheaper and more reliable than an extension of the existing Liddell infrastructure.”
