Australia's AGL defers two plants closures to avert blackouts
* AGL defers closures of Liddell, Torrens A plants
* Extension to help energy market cope with "critical
* Outlines plans to progress other power projects
(Adds analyst quotes, background)
By Devika Syamnath
Aug 2 (Reuters) - AGL Energy, Australia's biggest
power producer, said on Friday it will keep two power plants
open for slightly longer than previously flagged to help meet
any shortfall in electricity supply over the critical summer
AGL also outlined plans to progress several projects,
including hydro and gas, to cover the eventual shutdown of its
ageing coal-fired Liddell plant, as the company looks to move
away from coal to reduce its carbon footprint.
"There's a lot of pressure on companies such as AGL to
extend the life of their coal-fired stations, notwithstanding
the community's expectation of them heading more toward
renewables," said James McGlew, executive director of corporate
stockbroking at Argonaut.
Coal- and gas-fired power plants are essential to back up
intermittent supply from wind and solar power.
AGL said it had informed the Australian Energy Market
Operator (AEMO) of its new schedule "that will help the national
energy market cope with the critical summer months."
Three out of four units at its Liddell power station will
run for a year over schedule. The plant was originally slated to
close in 2022.
The ageing gas-fired Torrens A power station near Adelaide
in South Australia will be closed progressively by 2022 but
remain open this summer to help offset loss of production from
an ongoing outage at its Loy Yang A Power Station in Victoria.
The surprise extension and subsequent increase in production
would likely add about A$100 million ($68 million) to AGL's
pre-tax earnings in fiscal 2023, at current prices, said a
utilities analyst, who declined to be named as they were not
authorised to talk to media.
Blackouts and soaring electricity prices have been a hot
political issue in Australia.
AGL was strongly urged by the government last year to sell
or keep running its Liddell Power Station, as Australia has
suffered blackouts in previous summers when demand for
The government has also been eager to maintain competition
in the sector, but AGL rejected a A$250 million ($170 million)
offer for Liddell from Chinese-owned Alinta Energy.
($1 = 1.4674 Australian dollars)
(Reporting by Devika Syamnath in Bengaluru, additional
reporting by Rashmi Ashok; editing by Richard Pullin)
First Published: 2019-08-02 01:58:01
Updated 2019-08-02 04:22:38
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