AGL to issue RFEOI for US$700 million wind projects

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Australian generation and utility company AGL has announced plans to issue Requests for Expressions of Interest for 500 MW wind projects in an attempt to replace the power produced by its Liddell coal-fired power plant, which will be shut down in 2022.

The company stated that it is looking to procure either two or three projects of between 250 to 300 MW, or one large 500 MW project. It has set a price target range of around AUD900 million (US$713.9 million).

AGL announced the closure of the 2000 MW Liddell power plant in December 2017, despite strong opposition from the Australian government. The plant is located near Muswellbrook, in the Hunter Region of New South Wales. The four generators were brought into operation between 1971 and 1973.

AGL plans to replace the 8 terawatt hours of power generated annually by the Liddell plant with six terawatt hours generated by renewable energy, one with gas, and one from other sources including through an upgrade of AGL's Bayswater coal-fired power station.

The company expects to receive responses to the RFEOI within the month, marking a swift start to the replacement programme. This swiftness is necessary - without replacement, the closing of the Liddell plant in 2022 could create a 1,000 MW gap in base load, dispatchable power generation.

The need for speed is also evident in the details that AGL has disclosed about the procurement. The company has stated that it is seeking projects that will require it to source a constructor contractor and arrange funding only. Eligible projects will have well progressed through the planning process, or will have already been permitted and secured land access agreements. The locations will have to have at least three years of wind data and be as close to transmission infrastructure as possible.

As well as these wind projects, AGL is considering pumped hydro potential in the Hunter Valley, in an attempt to provide more stable renewable generation and overcome intermittency issues of wind and solar. 

The projects procured will add to AGL's considerable wind portfolio, which consists of AUD450 million (US$357 million) 200 MW Silverton wind farm located in western New South Wales and the 453 MW Cooper Gap wind farm in Queensland, which will be both Australia's and the Southern Hemipshere’s largest single wind farm. Both are currently under construction.