Climate change: AGL to close coal fired power plant Loy Yang a decade early
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One of Australia’s largest coal-fired power stations will close a decade early as a major energy supplier switches from fossil fuels
- Energy supplier AGL closes large power plant Loy Yang A earlier than planned
- Victorian factory was supposed to close in 2045, but AGL wants to go ‘net zero’ by 2035
- Loy Yang A is Australia’s largest polluting coal-fired power station
- Power plants in NSW are also shutting down, but their closure remains on track
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Australia’s largest electricity producer, AGL Energy, is going ‘net zero’ after abandoning plans to split into two companies.
Australia’s largest carbon emitter announced on Thursday a plan to end all coal-fired generation by the end of fiscal year 2035, with annual greenhouse gas emissions cut from 40 million tons to net zero.
AGL chairman Patricia McKenzie said the company will have “net zero” emissions after the shutdown of all of AGL’s coal-fired power plants.
The plant to close will include Liddell and Bayswater in NSW and the Loy Yang A power station that supplies nearly a third of Victoria’s power supply, which will close ten years before its scheduled 2045 shutdown.
‘This is one of the key decarbonisation initiatives in Australia,’ said Ms McKenzie.
Loy Yang A power plant in Victoria (pictured) will close 10 years ahead of schedule
The financial impact of bringing forward the Loy Yang closure includes a $700 million impairment charge.
Billionaire shareholder Mike Cannon-Brookes foiled the energy giant’s planned split, which would have created an energy retailer and divested aging coal-fired operations that would have operated longer.
Incoming interim CEO Damien Nicks said the shutdowns represent a major step forward in decarbonising the Australian economy.
AGL plans to invest up to $20 billion in new renewable and energy storage assets by 2036, funded through on-balance sheet assets, off-take agreements and partnerships.
This includes a target to have up to 5 gigawatts of new renewables by this decade, compared to a planned 3.2 GW pipeline of projects.
Mr. Nicks said the ‘ambitious’ strategy would deliver clear long-term value for AGL and its shareholders.
AGL has also updated guidance for the current fiscal year and says revenues would remain “resilient” as the generator is well positioned to benefit from higher electricity prices.