AGL to press pause as NSW powers on

AGL Energy has paused its Newcastle gas plant decision and is reviewing a giant battery investment at Liddell, amid uncertainty around the NSW government’s controversial energy blueprint, in a move that may also nix Scott Morrison’s hopes for 1000 megawatts of new power capacity to be committed in the state by April.

AGL Energy has blamed the NSW government’s controversial energy blueprint for a decision to delay its Newcastle gas plant. Picture: AAP
AGL Energy has blamed the NSW government’s controversial energy blueprint for a decision to delay its Newcastle gas plant. Picture: AAP

Big energy producers and users had already raised fears over a plan by the NSW government to underwrite investment in renewable and storage generation, saying the move would distort market signals and detract from a national approach already underway.

AGL said the state’s energy roadmap — which aims to attract $34bn in private investment spread through renewable energy zones — meant it would have to defer and review the two major NSW projects as it seeks to understand the implications of the policy. The power giant, Australia’s largest electricity generator, had been planning a final investment decision by early 2021 on its proposed 250MW Newcastle gas-fired power plant at Tomago.

“While a final investment decision wasn’t scheduled until the first quarter of next year, we had recently locked in an option on an equipment supply contract to accelerate the development once we were ready to go,” AGL chief financial officer Damien Nicks told the UBS Australasia conference on Tuesday.

“The recent announcement by the NSW government of their Energy Roadmap means that we will need to pause this acceleration and defer FID until we understand the detail that sits behind the announcement and the legislation. We will continue to progress the planning approval for Newcastle but need time beyond April 1, 2021, to understand the implications of the NSW policy announcement.”

A plan to convert its Liddell coal power station in NSW’s Hunter Valley into a giant battery park is also under review as it moves closer to shutting down the ageing plant in the 2022-23 summer.

Read the full article published in the Australian 18th November 2020