The Liddell Power Station has played an important role in supplying electricity in NSW for nearly 50 years.
In 2015, AGL announced it would close Liddell in 2022. AGL later extended this to April 2023. This would make Liddell the next in a series of coal power station closures. In the past 10 years closures have removed over 5000 MW of capacity from the National Electricity Market (NEM).
The Australian Energy Market Operator warned there would be a higher risk of blackouts in NSW after Liddell closes, without more investment in dispatchable power.
As a result of these concerns the Australian Government set up the Liddell Taskforce in August 2019.
It examined the effect of the planned closure on price, reliability and security in NSW and the NEM. It also considered the impact on dependent industries and the local region.
Australian Government response to Liddell Taskforce report
The government announced its response to the report on 15 September 2020, supporting all recommendations from the Liddell Taskforce.
The government will not accept the scenario of Liddell closing without sufficient replacement capacity because this will have an unacceptable effect on electricity prices and grid reliability.
The government set a target for the private sector to commit to delivering 1000 MW of new dispatchable capacity by the end of April 2021, to come online in NSW by the summer of 2023-24. The 1000 MW figure was informed by advice from the Liddell Taskforce, information from AEMO, and the results of modelling commissioned by the Taskforce.
EnergyAustralia announced that its Tallawarra B 316 MW open cycle gas turbine would go ahead with $83 million in support from the Australian and NSW governments. Tallawarra B, together with the initial 30 MW Mt Piper upgrade, contributed 346 MW to the 1000 MW target.
The government was clear that if insufficient projects were brought forward by the private sector, it would step in to ensure the target was met. Therefore, the government is committing up to $600 million for Snowy Hydro Limited (SHL) to build its Hunter Power Project.
The Hunter Power Project involves construction of a 660 MW open cycle gas turbine at Kurri Kurri. It will provide a valuable source of dispatchable and flexible generation, which will firm variable renewable energy, respond to peaks in demand and provide essential system services when most needed.
Building the Hunter Power Project will support the objectives of the government’s gas-fired recovery, which is critical to Australia’s recovery from COVID-19.
Protecting families and businesses from higher energy prices Ministerial media release 19 May 2021
Ensuring affordable, reliable and secure electricity supply joint Ministerial media release 15 September 2020
Liddell Taskforce to address reliability and power prices Ministerial media release 9 August 2019