Rise of renewables sparks closure of Torrens Island gas power plant


AGL Energy has announced it will bring forward the closure of its 600 MW gas-fired Torrens Island B power station in South Australia to 2026 instead of 2035 as previously planned due to financial pressures prompted by the ongoing penetration of renewables into the energy grid.

“We are losing money with this power station in the current environment,” AGL chief operating officer Markus Brokhof said on Thursday.

AGL said the decision was driven “in part” by the construction of the 900-kilometre EnergyConnect transmission link which is being built between South Australia and New South Wales and is expected to be ready by the middle of 2026.

The interconnector “will further impact gas-fired generation in South Australia and as a result the economic viability of the power station,” AGL said.

AGL mothballed one of the Torrens Island plant’s four units in October 2021. The remaining three units are now to be retired on June. 30, 2026, instead of 2035 as previously planned.

The decision to fast track the closure of the gas-fired power plant is the latest step in AGL’s strategy to transition from traditional baseload energy generation to more flexible sources as it navigates the shift to renewable energy.

The Torrens Island big battery is expected to be fully operation by early 2023.

Image: AGL

The move comes just days after AGL announced that the 250 MW/250 MWh Torrens Island battery being developed at the site is one step closer to “full functionality,” after getting approval to start the energisation process.

AGL said it had received permission from the Australian Energy Market Operator to start energising the battery’s 275 kV cable and main transformer.

“That means the battery’s auxiliary equipment can now be progressively energised to facilitate commissioning, a key step before connecting the battery itself,” the company said.

The battery is part of AGL’s strategy to transform its Torrens Island site into a low-carbon industrial energy hub.

AGL said in the past four years it has invested $475 million (USD 320 million) in major energy projects on Torrens Island, including the big battery and the 210 MW Barker Inlet Power Station, which opened in 2019.

AGL also recently announced a feasibility study into the development of a green hydrogen facility at Torrens Island.

“Torrens Island will continue to play a crucial role in AGL’s current energy requirements and future generation plans as the site is transformed into an integrated industrial energy hub,” the company said.

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