AGL’s announcement that it will close the remaining three generation units at its ageing, 800 megawatt Torrens B gas-fired plant in South Australia almost a decade early is certain to raise the heckles of those concerned that it will exacerbate the already concerning gas crisis.
Except for the niggling fact that it probably won’t have much, if any, impact at all.
There are several reasons why. Some of them come straight from the electricity generator itself.
First off, the planned shut-in on 30 June 2026 gels with expected completion of the Project Energy Connect interconnector between South Australia and New South Wales in mid-2026, which the company says is expected to “further impact gas-fired generation in South Australia and as a result the economic viability of the power station”.
In simple terms, AGL is saying that the gas plant simply can’t compete with renewable energy generation in South Australia.
The state is already poised to become the first grid of its size to operate without any synchronous generation within the next few years with the Australian Energy Markets Operator already considering reducing its minimum South Australian synchronous generator requirement from two units to just one unit.
Second of course is that Torrens B is old, seriously old. The gas plant first started operations in 1976 meaning that its closure will coincide roughly with its 50th birthday.
That the first of four generating units – B1 – was mothballed in October 2021 just highlights how old the plant is.
It is also telling that AGL has waved on any potential financial impact, saying it wouldn’t affect its underlying profit for the current financial year or in the longer term.
Gas plant closing in 2026, not now
As for concerns that it will impact on the gas crisis, it is worth noting that AGL intends to close the doors in 2026, not now, meaning there are still a couple of years for the plant to help keep the lights on.
AGL also opened the much newer (if smaller) 210 MW Barker Inlet gas-fired power station in 2019, which with 12 separate high-efficiency reciprocating engines, provides the right mix of firming capability and flexibility to support the grid, especially when combined with the 250MW Torrens Island battery, which is expected to be operational in mid-2023.
The company is also pushing zero emissions energy with plans to develop a green hydrogen facility at Torrens Island.
However, here’s the point that might be missed. It is not the amount of gas-fired power generated that is causing the energy shenanigans over on the East Coast.
Nay. It is gas SUPPLY that’s the issue. It is the years of underinvestment into upstream activities – exploration, development and production – that was compounded by Russia’s invasion of Ukraine.
Securing gas supplies is what’s needed to address high gas prices, not keeping an ageing gas plant that might not even have gas to operate with operational, especially one that still has a few more years on its clock.
Years that could see new renewable energy, battery or even hydrogen pick up the slack, and some.