Latest Coal Plant Closure Speeds Australia’s Renewables Push

May 08, 2023 by Shannon Cuthrell

Australia’s Liddell coal-fired power plant closed last month, marking the latest of several coal retirements over the last decade, with more on the way as the country accelerates its renewable energy transition. 

After more than 50 years in operation, Australia’s Liddell coal-fired power plant finally closed last month, with the owners planning to decommission and demolish the site to build a clean energy hub. 


Liddell coal plant

The Liddell coal plant is part of the larger Macquarie Power Stations complex, also home to the Bayswater coal facility (pictured in the foreground, with Liddell in the distance). Image used courtesy of AGL Energy


The power station came online in 1971 as Australia’s first-of-its-kind inland facility. AGL Energy, a Sydney-headquartered company overseeing the country’s largest share of electricity generation, purchased Liddell and the nearby Bayswater power station from the New South Wales state government in 2014. 

AGL closed the first of Liddell’s four 500 MW units in 2022, and the remaining three retired in April 2023. The full decommissioning process, which entails demolishing, recontouring, and revegetation, will likely take several years. AGL plans to recycle 90% of the materials throughout the decommissioning and demolition phases. 


Video used courtesy of AGL Energy


Situated about a five-minute drive apart, the Bayswater station supplies 2.6 gigawatts (GW), and Liddell provides about 2 GW. Production from the two plants meets nearly a third of the electricity demand in New South Wales, the country’s most populous state with 8.24 million inhabitants out of 25.7 million nationwide. Liddell produces 6,000 gigawatt-hours (GWh) of electricity annually, enough for around 750,000 Australian homes, while Bayswater produces 15,000 GWh, equal to 2 million homes. 

In Liddell’s place, AGL will construct a “Hunter Energy Hub,” utilizing several renewable energy resources. The company secured planning approval for a 500 MW/2 GWh grid-scale battery last year, and it’s also exploring the possibility of adding wind, pumped hydro, and solar to the site. 


Liddell Coal Plant Closure

Liddell’s closure is part of AGL Energy’s long-term plan to eliminate its coal footprint and increase its deployment of renewables. It will invest up to $20 billion in supplying its customer demand with 12 GW of renewable and firming capacity by 2036. 

AGL is Australia’s largest electricity generator and its largest emitter of greenhouse gases. According to the company’s climate transition plan, its Scope 1 and 2 emissions represent around 8% of the country’s total footprint. Over 95% of AGL’s Scope 1 emissions come from coal combustion at three power stations. 


Liddell coal plant claims a sizable share of AGL Energy’s 2022 Scope 1 and 2 greenhouse gas emissions

The Liddell coal plant claims a sizable share of AGL Energy’s 2022 Scope 1 and 2 greenhouse gas emissions. Image used courtesy of AGL


To reduce that footprint, AGL will close its Bayswater facility between 2030 and 2033, and its Loy Yang A plant in Victoria is scheduled to decommission by the end of 2035. AGL hopes to reach net-zero emissions status following the closure of its coal assets. In the near term, AGL targets a 17% reduction in its annual Scope 1 and 2 emissions against 2019 levels by 2024 after Liddell closes. And once Bayswater closes, it’s eyeing a 52% cut in its annual emissions. 

Liddell, Bayswater, and Loy Yang A are three of several coal plants set to decommission across Australia in the coming years. The 2.8-GW Eraring black coal fuel plant will be decommissioned in 2025 after more than 30 years in operation. Western Australia’s Collie and Muja coal plants are slated to close in 2027 and 2029, respectively. 

Another ten plants running on brown and black coal fuel have closed since 2012, accounting for 5.1 GW of capacity. 


International Energy Agency’s 2023 Australia Energy Policy Review

The International Energy Agency’s 2023 Australia Energy Policy Review tracks coal capacity levels and planned decommissioning activities from 2020 to 2050. Image used courtesy of the IEA


According to the International Energy Agency’s (IEA) 2023 Australia Energy Policy Review, the Australian Electricity Market Operator reports that around 16 GW of thermal generation (including 61% of the existing coal fleet) is slated to retire, with the country eliminating coal’s use in power generation by 2043. 


Australian Renewables Adoption

The Australian government aims to add enough renewable projects to claim 82% of the country’s energy mix by 2030. Official figures for renewable penetration remain outdated as the government hasn’t released its 2022 statistics. However, the Clean Energy Council’s Clean Energy Australia Report estimates that 35.9% of the country’s electricity generation came from renewables in 2022, up from 32.5% in 2021. New South Wales is home to the highest renewables deployment of all states, producing 21,765 GWh. 

According to the Clean Energy Council, Australia added 2.7 GW of rooftop solar capacity and 2.3 GW of large-scale projects in 2022. Also, more than 70 large-scale projects are under construction or financially committed. As EE Power covered recently, the country is in the middle of a residential energy storage boom, with 47,000 installations last year, marking a 55% rise from 2021. 

Several grid-connected battery projects have recently secured approval at former coal plant sites. Origin Energy will build a 700 MW battery to replace coal generation at the Eraring power station once it closes in August 2025. Meanwhile, Shell Energy will develop a 500 MW/1 GWh battery energy storage system in New South Wales, where two coal-fired generating units once stood before decommissioning in 2014. 


Wallerawang 9 Battery project site

Upcoming Wallerawang 9 Battery project site in New South Wales. Image used courtesy of Shell Energy


However, coal still accounts for a decent share of Australia’s generation mix, falling slightly from 59.1% in 2021 to 54.6% in 2022. 

Australia’s characteristically sunny and windy features make it a natural draw for solar photovoltaic and wind turbine projects, but policy differences have limited its growth in this market. Another challenge is designing storage and transmission systems capable of transferring renewable energy over long distances between population hubs. According to the IEA, an 82% penetration of renewables in the electricity mix is possible for the island nation, but not without increasing its implementation of renewable energy zones, faster permitting processes, and additional coal retirements.