In the second of two features, we look at the plan for the site that became ‘history’ before being implemented, and what lies ahead. Read the first here

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by Peter Hannam
Mon 17 Apr 2023 11.00 AEST
Last modified on Mon 17 Apr 2023 13.19 AEST

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When AGL Energy was in a tangle with the Turnbull government over the future of its Liddell power station in 2017, it drew up an extensive scheme listing how it would replace the coal-fired plant with equivalent generation capacity.

The Generation Plan proposed a mix of renewable energy, gas-peaking plants and battery storage, some of which would be on or near Liddell’s site in the New South Wales Hunter Valley. Its sister coal-fired power station, Bayswater, would also get an upgrade.

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Worker’s belongings in the workshop at Liddell Power Station
Bayswater power station will provide 100 jobs for the 140 employed by Liddell. The rest will retire or leave the industry. Photograph: Blake Sharp-Wiggins/The Guardian

AGL’s then chief executive, Andy Vesey, estimated the capital investment would total almost $1.4bn, with the new assets operating for as long as 30 years. By contrast, extending Liddell’s life beyond its planned 2022 closure would cost $920m and only add five years to a plant then almost 50 years old.

As events transpired, the then prime minister, Malcolm Turnbull, and Vesey both got rolled on the same day, 24 August 2018. “They lost their PM over energy and we lost a CEO,” one AGL insider says.

With Liddell finally shutting on 28 April, business leaders and local officials are hopeful alternative generation projects and manufacturing will eventually fill the site even if few of AGL’s proposed ventures have progressed.

“There was initially a level of ‘this is going to be a bit of a shock to the system’,” says Danny Eather, president of Business Singleton, which represents about 180 local businesses. “Liddell is really beyond its lifespan as a facility, and I think there’s a general acceptance within the community that this is what had to happen.”

Mike Kelly, president of the Muswellbrook Chamber of Commerce and Industry, further up the Hunter Valley, says it’s still unclear what will replace Liddell.

“Despite the early notice [of Liddell’s demise], driven by government policy, there is still a lot of uncertainty and cynicism,” Kelly says.

“You wouldn’t turn off the town water supply to your house if you were planning to put in big tanks next year,” he says. “And you wouldn’t turn off the grid main supply if you’re planning to put solar panels and wind turbines on your property in the next year or two or five.”

Authorities, though, are confident Liddell’s shutdown won’t disrupt the power grid. The Australian Energy Market Operator forecasts the state “will maintain a reliable power supply”, says Penny Sharpe, the state’s new energy minister.

“Liddell is now more than 50 years old. It’s been unreliable for many years, and not operating at its rated capacity,” Sharpe says. “In 2022, Liddell made around 1,260 megawatts available, a fraction of its 2,000MW rated capacity, and generated only around 7,000 gigawatt-hours across the year.”

Vesey’s successor at AGL, Brett Redman, became much more cautious about the rush to invest in new renewables. Plans for a gas-peaker plant near Goulburn and one in the lower Hunter were scrapped altogether, while investments in new batteries and pumped hydro plants at Liddell or nearby have taken longer than expected, insiders say.