![]() ![]() There are plenty of moving parts, with other generators coming into and out of the grid. The obvious question is, what does it all mean for Origin Energy’s Eraring, which is slated for closure in 2025? That timetable is under review, while Origin’s energy markets business is under a takeover offer from Canada’s Brookfield and is subject to review by the competition regulator.Īn independent report for the NSW government on the ability for the state power system to weather Eraring’s closure is due to be completed in early August, while federal Climate Change and Energy Minister Chris Bowen said this week that any extension of Eraring units would be a matter of “months, not years”. Ironically, despite Liddell’s closure in late April, AER said there was more black coal capacity offered into the market this year compared to the same time last year, when multiple baseload outages, high international coal and gas prices and fuel constraints hit supply and saw prices skyrocket. It also said seasonality (colder weather in the southern states, a decline in solar generation) was a factor. It said the closure contributed to higher electricity prices in the June quarter compared to the March quarter, although the closure was partially offset by 1100 megawatts of new solar, wind and batteries capacity. Interestingly, the Australian Energy Regulator called out Liddell’s closure in its review of June quarter electricity prices released on Thursday. “There is still not enough of the equivalent firming dispatch from renewables or other sources to offset that plant coming out of the market.” “Despite five years of planning, there has been a significant step change in wholesale electricity prices post Liddell’s shutdown,” he says. While it is open to debate how much seasonality is in the numbers given the timing of the closure and the onset of winter – and it is a debate, no one can know for sure – Allen reckons it cannot be disputed what happens when a big coal-fired power generator is removed from the electricity market. It doubled in South Australia and was 14 per cent higher in Queensland. In NSW, home of Liddell and Eraring, the average realised wholesale price was 32 per cent higher in the period after Liddell’s closure, while in Victoria, the price was up 27 per cent. What ensued was years of planning – by AGL, governments, energy regulators – delays and eventually a staged shutdown, in a bid to minimise the impact and ensure the lights didn’t go out and prices did not skyrocket.īut for all the planning, wholesale electricity prices have increased materially since Liddell was shut.īy how much? UBS utilities and energy analyst Tom Allen did the numbers this week, comparing the average realised wholesale electricity price in the 85 days since Liddell’s closure to the preceding 85 days, across the four main states in the national electricity market. It had been on the cards since 2015 when the company’s then chief executive Andy Vesey set a new climate policy for the electricity producer, which included a commitment not to extend the life of the coal power stations.Įlectricity prices have gone up since AGL Energy closed its Liddell power station in NSW. ![]() ![]() ![]() As debate rages about the shutdown or phased shutdown of Australia’s biggest coal-fired power station Eraring, recent history shows closing big generators leads to a material rise in power prices.Ībout 12 weeks ago, AGL called time on its Liddell power station in the NSW Hunter Valley, in a carefully planned exit. ![]()
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