Page 5 - AsiaElec Week 26
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AsiaElec COMMENTARY AsiaElec
Coal
In June, AGL warned its scal 2020 earnings could be A$60mn ($42mn) lower because one generating unit at its ageing coal- red Loy Yang A power plant in Victoria would be o ine until December because of a short circuit.
Meanwhile, back in March, the federal gov- ernment put pressure on AGL, asking how it proposed to replace the 1,680-MW coal- red Liddel thermal power plant (TPP) in New South Wales, which is due to close in 2022.
AGL has outlined plans to build new capac- ity in NSW, including expansion of the nearby 2,640-MW Bayswater TPP at a cost of A$200mn ($140mn), the construction of 1,600 MW of renewable capacity and the development of 250 MW of battery storage over ve years. It aims eventually to end using coal by the 2040s.
It also plans to develop an A$470mn (US$329mn), 250-MW pumped storage hydro station in the Bells Mountain region, and has signed a 255-MW solar power offtake agree- ment with a solar project operated by China’s Maoneng.
In South Australia, AGL is investing A$295mn ($207mn) in the 210-MW, gas- red Barker Inlet Power Station.
Other investors, such as Sunset Power Inter- national (SPI), including Alinta Energy and Delta Electricity, have suggested keeping Liddell open, although they have not attracted funding and AGL is not keen to sell.
Complex politics
In the midst of these investment plans, AGL faces a complex political background.
South Australia and Western Australia have made the decision to boost renewables but have su ered from power cuts. NSW and Queensland both favour continued use of coal and fossil fuels, although there is strong environmental opposi- tion, and access to capital is not easy as many banks divest from coal.
e new right-of-centre federal government must come up with a way of controlling costs and creating a more balanced grid, while putting pressure on privatised generators to keep down wholesale prices in order to prevent rising bills for end users.
Despite the move against coal, the fuel was still responsible for 73.9% of grid power in Aus- tralia in 2018, when total demand averaged 33,941 MW, followed by hydro with 8.1%, gas with 8% and wind with 7.8%.
At the downstream end of the power sector, AGL faces strong opposition in a highly com- petitive retail market. Competition has pushed annual bills down by A$760 ($530) , the Aus- tralian Energy Market Commission claimed recently, while nearly one in four customers has changed retailers.
AGL faces a politically uncertain and com- petitive power market in Australia in future and will continue to nd new, albeit risky, ways to drive revenues.
AGL faces strong opposition
in a highly competitive retail market
Week 26 02•July•2019 w w w . N E W S B A S E . c o m
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