Big battery to replace country’s dirtiest coal power plant, Yallourn, as early closure announced

One of Australia’s major electricity retailers, EnergyAustralia, on Wednesday announced it would “power ahead with energy transition,” replacing Yallourn coal-fired power station in Victoria’s Latrobe Valley with a four-hour 350 MW capacity big battery.

Yallourn is Australia’s dirtiest power plant and its retirement will cut 60% of EnergyAustralia’s carbon dioxide emissions in one fell swoop. Originally scheduled to close in 2032, the power station will now be retired by mid-2028, with its 500-person permanent workforce given a $10 million support package. Yallourn currently supplies about 20% of  Victoria’s electricity demand or eight per cent of the National Electricity Market.

Greenpeace Australia has labelled the announcement a ‘death knell’ for the country’s struggling coal industry. “EnergyAustralia’s revised timeline for closure shows that the operators of Australia’s coal-burning power stations can read the writing on the wall,” Greenpeace Australia Pacific senior campaigner Glenn Walker said.

Reading the signs, Victoria’s Labor Government has put renewable energy at the heart of its Covid recovery plan, investing $1.6 billion in clean energy in its 2020-21 Budget. By 2028, an additional 5 GW of new renewable energy is scheduled to come online in Victoria.

Tidal wave of renewables hastens coal-fired closures

Baseload electricity prices have plummeted in the last 12 months as new renewable energy projects have come online both in Victoria and across Australia, outing coal-fired stations as not only the dirtiest form of electricity generation but increasingly the least economically attractive – undoubtedly hastening imminent retirements like Yallourn’s.

Eager to not be left behind in the transition, EnergyAustralia has committed to delivering the big battery by 2026, claiming it would be “larger than any battery operating in the world today” – which seems unlikely given both Neoen and Origin announced plans for 500 MW and 700 MW batteries respectively in January. Nonetheless, the shift is seismic and follows moves similar to those made by energy giants Origin and AGL, which both have massive amounts of energy storage proposals in their project pipelines.

“The energy transition is too important to leave to chance – a plan that supports people, the Latrobe Valley and locks in energy storage capacity before Yallourn retires will ensure the smoothest transition possible,” EnergyAustralia’s Managing Director, Catherine Tanna, said in a statement today.

“EnergyAustralia is determined to demonstrate that coal-fired power can exit the market in a way that supports our people and ensures customers continue to receive reliable energy.

“Meanwhile, our new battery will help to secure Victoria’s energy supply and enable more renewables to enter the system.

“Customers want affordable, reliable, cleaner sources of energy and as Yallourn has proudly supplied energy for 100 years we want to harness our history, and the expertise of our workforce, to repower Victoria.”

Given Yallourn’s current generation capacity sits at around 1480 MW, EnergyAustralia says it plans to ensure storage is built to firm increased renewable energy in Victoria before Yallourn exits the system.

The future to run on batteries

“Today is really Day One of a long-term plan that brings together many people across the energy sector to work together to deliver the clean energy transformation for all,” Tanna added.

Greenpeace is calling for AGL to follow EnergyAustralia’s lead and bring forward the closure date of its Loy Yang A coal-fired state which is also in the Latrobe Valley. “Dirty, inefficient and unreliable coal power stations like Yallourn and Loy Yang A have no place in a modern electricity grid – and what’s more, they’re driving up electricity prices and delivering poor returns for investors,” Walker said.

Such news hardly seems like it would be welcomed by the region’s mayor, however. “The Valley can’t sustain these hits,” La Trobe City council mayor Sharon Gibson told the Sydney Morning Herald today. “For every direct job, there’s three or four indirect jobs lost.”

Victorian Government’s response to news of the closure

Victoria’s Minister For Energy, Lily D’Ambrosio, released a statement hours after EnergyAustralia broke the news, saying the Andrews Government will work with the company to transition the Yallourn workforce.

“The truth is we’re seeing these old, coal fired power stations creaking to a stop right around the world as countries and companies are switching to new, clean, more reliable and more efficient forms of energy,” the statement read.

“We can’t ignore that change or pretend it’s not happening – and we owe it to these workers to build a modern energy network that creates and supports thousands of Victorian jobs.

“We’ll make sure this workforce is at the heart of our long-term response to today’s announcement, and we will deliver a dedicated support package.

“Our focus will be on helping workers retrain, reskill and find new opportunities. We’ll design worker and supply chain transition programs, a worker transfer scheme and ongoing support services – delivered in consultation with workers, unions and the local community.”