AGL airs its power woes to win over gov't

AGL has opened up its Liddell coal-fired power station to media scrutiny in a bid to explain why the NSW Hunter Valley plant should close as scheduled in 2022.

AGL Chief Economist Tim Nelson and General Manager Kate Coates.

AGL's Tim Nelson and Kate Coates at the ageing Liddell coal-fired power station in NSW. (AAP)

I'm in a giant tin shed crammed with pipes and machinery.

It's hot, muggy, cramped and much of the metal looks grubby and dented.

Welcome to Liddell power station in the NSW Hunter Valley.

The workers here are proud they're able to keep this "old lady" limping along but it takes compromise on power output, continuous maintenance and a bucketload of money.

At the moment, Liddell is running with only two of its four generators.

One is out for scheduled maintenance, while a second has developed a mysterious wobble in one of its turbines and can't be powered up until someone works out what's going on.

AGL Macquarie general manager Kate Coates - who runs Liddell and the newer and neighbouring Bayswater - runs through a lengthy list of what can and does go wrong at the "geriatric" plant.

Problems include water leaking into electrical systems, a "clapped out" rusty and rickety coal conveyor system, an ash disposal dam that will be full in 2022, an "old and unreliable" ash filter system, and hundreds of kilometres of eroding pipes.

Those physical problems are before you get to the difficulty in securing coal to feed the boiler fires - AGL has been rationing supply for some months - and finding space on the busy rail networks to get it to the generator.

But the biggest problem is leaks in the boiler tubes.

The steam they hold is under such pressure a leak can cut clean through the tube next to the cracked one. In March 2016, the force of one such leak threw a 10kg inspection door 100m off the boiler unit.

And they're loud. Last year AGL had to send staff to homes on the other side of Lake Liddell (which, incidentally, is full of brain-eating amoebas) to apologise for the jet engine-like sound they could hear in their lounge rooms.

Leaks forced two of the four boilers out of action during the February heatwave when the Tomago aluminium smelter had to close down or risk wider NSW blackouts.

"We were running the unit hard, we had a few hot days in a row, we were pushing the boundaries of our sweet spot," Coates explains.

"Liddell's an old lady and you can't ask an old lady to run a marathon a few days in a row without her falling over."

The very public listing of the 45-year-old power station's failures comes as AGL faces pressure from the Turnbull government to keep the plant open beyond its planned 2022 shut down.

Fewer than one per cent of thermal power stations around the world run for longer than 50 years, largely because it's not economic to do so.

AGL has spent nearly $140 million on Liddell since buying it from the NSW government three years ago and it's facing maintenance bills of about $150 million over the next five years just to keep it running.

"That's on a sliding scale to oblivion, frankly," Coates said.

"The failures become more regular, the weak points larger and more numerous. We are fighting a losing battle."

An independent "desktop" study done in 2013 for the NSW government suggested it would take $900 million to keep Liddell running an extra decade beyond 2022 (the Turnbull government is now suggesting it stay open an extra five years).

Extending its life would require serious work on the boilers, replacing the turbine trains, revamping the conveyor system, and a complete rebuild of the ash and dust filter system.

The push to keep Liddell open was sparked by an Australian Energy Market Operator report warning 1000 megawatts of dispatchable power - which can be sent to users when it's needed, not just when it's generated - was needed to replace the coal generator.

The AEMO report appears to have surprised the government, but is in line with industry expectations.

The political response, however, has surprised industry. A week ago, former green-bank head Oliver Yates said if the government just let AEMO get on with its job of securing supply, the whole issue would be resolved and depoliticised.

AGL chief economist Tim Nelson says there's about 4500MW of new generation either under construction or about to have sods turned. This is mostly renewable, but if it's backed up with storage as recommended in the Finkel report it is some four times more than what AEMO says is needed.

Up to 15,000MW more new generation has planning approval or is being planned for the next five to 15 years.

The economics of the modern electricity grid - with a high penetration of renewables and volatile demand partly due to one in five houses having a solar system - make flexible generation that can be ramped up and down as needed the most suitable.

That's not coal, Nelson warns.

"When you switch it on, you leave it on, that's kind of what coal does," he said.

"You don't really use it as a type of technology to ramp up very quickly and take out very quickly and that's because it literally puts enormous stress on the boilers."

Pumped hydro, on the other hand, is perfectly suited to providing the kind of peaking power Australia needs, and gas stations can cover demand in the medium-term.


Share

5 min read

Published

Source: AAP



Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world