The company cited the planned completion of a new interconnector cable linking the South Australian and NSW power grids,known as Project Energy Connect,which would enhance the flow of renewable energy across state lines. This would “further impact gas-fired generation in South Australia,” AGL said,“and,as a result,the economic viability of the power station”.
“It was a very tough decision today,particularly for our people at Torrens Island,” AGL chief operating officer Markus Brokhof said.
AGL’s 120 workers affected by the plant’s closure were notified on Thursday morning. Brokhof said the difficult decision had followed years of consultations with SA’s current and former state governments,and the Australian Energy Market Operator (AEMO).
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AGL’s Torrens Island B power station,which opened in 1976,is running at a loss because its ageing technology cannot quickly ramp up and down in response to sharp swings in wholesale electricity prices. The influx of cheaper-to-run renewable energy can regularly push power prices into negative territory during the middle of the day when solar power is most abundant.
“We are losing money with this power station in the current environment,” Brokhof said on Thursday.
It comes as AGL,the nation’s largest power supplier and heaviest greenhouse gas emitter,is continuing to faceintensifying pressure from billionaire activist investor Mike Cannon-Brookes and other key shareholders to accelerate the decarbonisation of its power generation fleet. Earlier this year,the board resolved to close its last-remaining coal plant,Loy Yang A in Victoria’s Latrobe Valley,up to 10 years earlier in 2035,and invest $20 billion on renewable energy and back-up “firming” assets by 2036.