AGL has announced the early closure of the Loy Yang A power station in the Latrobe Valley, Victoria following a review of the company’s strategic direction.
This is a disappointing outcome for Australian households and businesses that are grappling with soaring energy prices and high cost-of-living pressures.
The energy giant has decided to bring forward the closure of Loy Yang A power station, which provides 30 per cent of Victoria’s electricity, to 2035 cutting more than a decade of generation from the grid.
The decision comes just months after the closure date of AGL’s Bayswater Power Station in New South Wales was brought forward to 2030-2033.
Combined this will result in the early exit of nearly 5GW of electricity from the National Electricity Market (NEM) by 2035, which powers over 4 million homes.
While this is a commercial decision for AGL, it is devastating for the more than 1,000 workers in the Latrobe Valley and Muswellbrook regions and will impact the livelihoods of thousands more workers and businesses across the local economies.
AGL must continue to support its workers and the local community during this challenging period.
The Coalition welcomes AGL’s 12GW replacement commitment but the company needs to step up and deliver. They owe this to their customers as a provider of an essential service.
Labor’s policy settings are accelerating the closure of power stations like Loy Yang A by undercutting the economics and forcing their departure from the grid without any guarantee that replacements will be operational in time.
AGL’s announcement comes as the Australian Energy Regulator and Energy Security Board told Australian households and business to brace for extended periods of higher power prices.
The peak energy bodies identified the early withdrawal of coal as one of the reasons prices will continue to soar and will remain high under Labor’s current policy settings.
Since coming to government, Climate Change and Energy Minister Chris Bowen has failed to provide a plan to deliver new dispatchable, on-demand power which is critical to keeping prices low and the grid reliable.
Instead, Labor is gambling on the premature closure of power stations to drive the uptake of renewables without any guarantees of replacement generation.
With no assurances of new on-demand generation capacity coming online in time, the early withdrawal of Loy Yang A will leave a gaping hole in Australia’s electricity market exposing the grid to blackouts and runaway power prices.
The Australian Energy Market Operator has itself forecast reliability gaps and warned of blackout risks from 2023 due to supply challenges.
Under the Coalition, Australians enjoyed lower lower prices and we were delivering the on-demand supply needed to keep the lights on.
Labor can not run and hide from this. Anthony Albanese must take immediate action to ensure Australians aren’t crippled with higher energy prices for decades to come.