Business Maverick

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Century-Old Australian Coal Plant Makes Way for Giant Battery

Ampd Energy Ltd.'s Enertainer battery units stand at the company's facility in Hong Kong, China, on Monday, Aug. 31, 2020. At a construction site near the Hong Kong waterfront, Gammon Construction Ltd. has swapped out the diesel generators normally used to power the giant cranes that erect the world's skyscrapers with batteries the size of shipping containers. Photographer: Lam Yik/Bloomberg

EnergyAustralia will accelerate the closure of a 100-year-old coal-fired plant and install a giant storage battery to achieve a faster transition to clean power that’s leaving aging fossil fuel sites uncompetitive.

The Yallourn site in Victoria’s Latrobe Valley, which supplies about 20% of electricity demand in the state, will shut by mid-2028 rather than 2032, the unit of Hong Kong-based CLP Holdings Ltd. said in a statement.

Under the plan, the electricity retailer will add a four-hour, 350-megawatt utility-scale storage battery — larger than anything currently in operation globally — in the same region as the coal plant by 2026.

Australia, which added a record amount of new renewable capacity last year, is an exemplar for the challenges the global energy sector faces in transitioning away from fossil fuels. A rush by households to install rooftop solar panels, and a surge in new grid-scale capacity, has hollowed daytime electricity demand and forced wholesale prices lower, upending the business models of utilities reliant on coal-fired power stations.

“The energy market transition is real and it’s happening fast,” EnergyAustralia Managing Director Catherine Tanna told reporters. It’s taking place quicker than most people forecast and the company wouldn’t rule out the potential addition of more gas-fired generation in Victoria, she said.

See also: Green Power Fueled Price Drop Hurts Australia’s Top Utilities

While coal still accounts for the bulk of Australia’s energy mix, a surge in new renewable generation capacity through 2025 will pressure more expensive fossil fuel assets and leave many plants uneconomic, the Institute for Energy Economics and Financial Analysis said in a report last month.

In New South Wales, Australia’s most populous state, four coal-fired power stations are scheduled to close over the next 15 years, starting with AGL Energy Ltd.’s Liddell plant in 2023.

“Coal-fired power stations have been the backbone of our energy system for decades,” Liz Westcott, EnergyAustralia’s energy executive and in charge of generating assets, told reporters. However, the system is “changing before our eyes” and less coal is required, she said.

Shuttering Yallourn, which has 1480 megawatts of generating capacity, raises concerns about energy reliability and affordability, Australia’s Energy Minister Angus Taylor said in a statement. The government “expects the market to step up to deliver enough dispatchable generation to keep the lights on and prices low,” he said.

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