AGL must choose the least harmful pathway to 2050
Over the 2020s, the prime undertaking of climate action in the world of electrons was making zero carbon technologies like wind and solar cheap, popular and the default option for construction regardless of ideology.
After years of sweat, grit and work from activists, engineers, community groups, businesses and policymakers, the replacement for pollution-heavy power is ready. Wind and solar are now the default option for new electricity generation, and can be integrated neatly into the grid at very high levels, with plenty of research underway to go from ‘high levels’ to ‘everything’. That race is run, and zero carbon technology won.
There’s a word in that previous paragraph that is doing a lot of heavy lifting. Can you spot it? It’s ‘new’.
Electricity demand is finite, and the room of suppliers is already crowded. To let the default replacement option actually do some replacing, you need to get rid of the old stuff — coal and gas-fired generation. The key fight of the 2020s will be around how to make room for new renewables.
The same roadblocks renewables faced in the 2010s will be here, too. Widespread denial of the facts. An uphill slog against corporate and political culture. Campaigns based on misinformation. And finally, once it’s widely accepted, opponents acting like they never doubted it all along. It’ll be a tough decade, but we know from the last one that our hard work will get us where we need to be.
Our safety is linked to how fast we kill coal
In the Australian Energy Market Operator’s 2020 ‘Integrated System Plan’ (ISP) — their scenario-driven lay-down of how the grid might or must change over the coming decades — the retirement of coal plays a big part in how far emissions fall.
The best-case emissions scenario in their report is accompanied by a near-double reduction in thermal (fossil-fuelled) capacity, between the black line (the central case) and the green line (the ‘step change’ case with most emissions reductions).
By default, the plan envisages these power stations simply shutting down at the end of their lifespan. There is no coal-fired power station in Australia that is expected to close earlier than its scheduled retirement date. And of the nearly 20 gigawatts of fossil fuelled machinery that’s set to close by 2042 in this modelling, just under five gigawatts is owned by AGL energy.
They own three coal-fired power stations — Liddell, Bayswater and Loy Yang A. Liddell is first off the block, due to shut down 2022–23. The government has been urging for an extension, but AGL just announced a plan to replace that site with a large-scale battery system. That coal plant alone is 1.6% of Australia’s total emissions.
Bayswater, in NSW, is next, due to shut down in 2035. That’s another 2.7%. And Loy Yang isn’t due to shut down until 2048 — two years prior to the net zero by 2050 deadline. That plant is around 3.5% of Australia total emissions. It has a stunning emissions intensity of 1.16 tonnes of CO2 equivalent for every megawatt hour of electricity generated— the grid average is 0.7.
Together, these three power stations comprise a stunning 7.8% of Australia’s entire emissions footprint. If they’re left to decay over time, they’ll continue emitting gargantuan quantities of a substance we know directly harms human life. AGL mostly stopped building new renewable midway through last decade. Their assets remain mostly comprised of fossil fuels, and their emissions footprint is truly massive:
Consequently, they now mostly spend their time paying to maintain power stations that we know are causing harm, and that we know can be replaced today:
AGL needs to bring forward shutdown dates
The ACCR has recently filed a resolution with AGL to shut these power stations down far earlier than their planned closure dates. They are carbon intensive and expensive to maintain. They are racked with reliability problems (which will only increase as heatwaves and extreme weather events increase, according to the ISP) — AGL’s recently announced underlying profit took a hit due to “the unplanned outage at AGL Loy Yang in the first half” of FY2020.
ACCR’s resolution was in response to AGL’s release of a forward looking scenario listing (partly inspired by the ISP), in June 2020. In their four scenarios, ‘D’ is the most aligned with climate science, and it shows the gargantuan Loy Yang shut down being moved forward from 2048 to 2035, to shut down alongside Bayswater:
This is, of course, a perfect example of what I’ve previously described as the ‘plump kitty curve’. By setting 2050 as a deadline for net zero, much of the action to actually reduce emissions can be back-loaded into the final decade. 2050 is a long time in the future. Prime Minister Scott Morrison will be 82 years old. Bob Katter will be 105. Pauline Hanson will be 96.
The line between now and 2050 can be ambitious, lazy or linear. Given the serious of the threat, ambition is the only moral option.
There needs to be policy pressure on output levels
It isn’t just the dates of shutdown that will decide the emissions harm from these machines. AGL say, in the report, that “Variance in the pace of emissions reduction between scenarios arises from varying load factors driven by the carbon constraints assumed in each scenario”. Put simply: ‘Load factor’ means how much power — and emissions — the thing spits out. Even before a plant shuts down, emissions will be far lower is there are policy constraints.
Under a 1.5C limit, Loy Yang doesn’t just close early — it’s also made to massively limit its output:
Globally, existing coal is shifting towards a trend where the plants simply output less power. That means they makes less money, despite the constant money for upkeep and maintenance. Unless AGL opts into a controlled, rapid shut-down of these plants, this will probably be their fate, too.
AGL are choosing a dark path — but can still change direction
On August 13, AGL released the full report, examining the four scenarios in more detail but essentially reaching the same conclusion — there are high emissions pathways to 2050, and low emissions pathways to 2050. There are diverging pathways to the same destination, with some that create more harm.
Sadly, buried in the heavy end of their report is the following paragraph (highlights my own):
“AGL operates within a highly regulated environment and our assets are critical to the continued reliability of the NEM in the short to medium term. While we are committed to the decarbonisation of our portfolio and expect the NEM to be at net zero by 2050, AGL is not able to make unilateral commitments to closing power stations in advance of government policy as this may lead to unintended outcomes. As such, AGL considers that setting targets to reduce our operated emissions in alignment with the requirements of the Science Based Target initiative (SBTi) is not currently practicable as this framework would require AGL to decarbonise by at least 50% by 2035. A commitment of this scale would require early closure or decreased generation output of part or all of AGL’s baseload generation fleet and could not be achieved unilaterally given the current regulatory framework in Australia”
It is strange to see a company so brazenly rejecting a pathway that follows the best scientific advice on protecting human life and the environment. But at the same time, AGL insists in the same report that “ Even when considering the deep decarbonisation required under the 1.5-degree scenario, AGL’s assets remain viable because of their low cost of operation and efficiency”. An optimistic, between-the-line reading might suggest the company is far more ready to engage in more rapid action, given the right external pressure.
It is, of course, true that the shutdown of coal ought to be carefully planned, and that federal policy and regulation needs to change. But we know that the Australian government doesn’t shift without pressure, and pressure from AGL, a titan in the industry, would be powerful. A plan to retire their most dangerous and harmful assets early to protect human life and welfare is the only logical and moral choice.
What happens between now and 2050 matters. AGL is, by their current declarations, on a dark path. But it is free to choose a pathway in which it engages in the comparatively simple task of replacing old technologies with new ones. That is far easier than allowing further harm to our only home.
The people who run the show at this company are holding the levers on how much climate harm is caused over the coming years, and it needs to make the right decision.
