Australian power utility, AGL is planning to close its 2GW Liddell power station located in the Hunter Region, New South Wales (NSW), Australia, and replace it with renewables, battery storage, gas peakers and other capacities.

The Liddell coal-fired power plant was initially planned to be retired in 2022.

However, the new plan comes as the company considers Liddell replacement would be preferred option compared to five-year extension option of the power plant beyond 2022, as requested by the government earlier.

As per the AGL’s new NSW generation plan, the company plans to replace the power plant with a mix of high-efficiency gas peakers, renewables, battery storage and demand response, as well as undertake an efficiency upgrade at Bayswater Power Station.

AGL has also signed contracts to purchase 300MW of generation from two new solar power stations to be developed by third parties in NSW.

The project also includes conversion of generators at Liddell into synchronous condensers.

Based on estimates, the Australian utility expects the replacement project at the facility to provide AUD83 ($62.3) per MWh, while life extension plan would pin the cost to AUD106 per MWh.

The firm also noted that the replacement plan would deliver reliable, dispatchable power for longer, due to a longer asset life of 15-30 years, compared with a life extension plan.

AGL chairman Graeme Hunt said: “This plan demonstrates that old power plants can be replaced with a mixture of new, cleaner technology, while improving reliability and affordability.

“Decisions for the investments are staged to enable flexibility to respond to the changing needs of the market and improvements in technology over the next five years.”

According to independent analysis, the cost of power plant life extension until 2027 would be approximately $920m.

Image: The Liddell Power Station located in New South Wales, Australia. Photo: courtesy of Webaware/Wikipedia.