AGL shuts down gas power unit in South Australia

Renewables continued lowering of power prices makes it harder for fossil fuels to compete.

AGL Energy has informed the Australian Energy Market Operator that it intends to mothball one of the four operational Torrens B units in October, the fiscal year 2022 (Torrens B1 unit).

The decision was made following consideration of reliable supply against the changes in capacity requirements and pricing.

According to the power company, the decision follows the continued decline in South Australian forward prices and the volume of new capacity that has come into the market, creating challenging conditions that do not currently support the financial viability of operating all four generation units.

The retirement date of the four units was supposed to be 2035.

AGL said the decision to mothball its unit has no impact on any of its 400 South Australian jobs.

Meanwhile, AGL said its construction of a 250 megawatts (MW) grid-scale battery is planned later this year, signalling the start of the company’s planned 850 MW of batteries.

The influx of high-scale renewable energy power projects and rooftop solar power in Australia has been edging fossil fuels out of the market.